UNIVERSITY  OF  CALIFORNIA    SAN  DIEGO 


3  1822  02766  2691 


MERIGAN  EMPIR 


SCOTT  NEARING 


LIBRARY 

UNWtRSlTY  OP 
CALIFORNIA 
SAN  DIE60 


UNIVERSITY  OF  CALIFORNIA,  SAN  DIEGO 


3  1822  02766  2691 


I0<o 


Social  Sciences  &  Humanities  Library 

University  of  California,  San  Diego 
Please  Note:  This  item  is  subject  to  recall. 

Date  Due 

MAR  1  ?  2001 

CI  39  (5/97)                                                                          UCSD  Lib. 

THE  AMERICAN 
EMPIRE 


By 

SCOTT  NEARING 

-^ 

Author  of 

Wages  in  the  United  States^' 

Income 

Financing  the  Wage- Earner  s  Family" 

Anthracite" 

Poverty  and  Riches,  "  etc. 


NEW  YORK 

THE  RAND  SCHOOL  OF  SOCIAL  SCIENCE 

7  EAST  I5TH  STREET 

1921 

wf //  rig/its  reserved 


Copyright,  1921, 

by  the 

RAND  SCHOOL  OF  SOCIAL  SCIENCF. 

First  Edition,  January,  1921 
Second  Edition,  February,  1921 


CONTENTS 

PART  I 

WHAT  IS  AMERICA? 

CHAPTER  PAGE 

I     The  Promise  of  1776 7 

II     The  Course  of  Empire 14 

PART  II 
THE  FOUNDATIONS  OF  EMPIRE. 

A.  The  Conquest  of  Amepjca. 

III  Subjugating  the  Indians 26 

IV  Slavery  for  a  Race 38 

V     Winning  the  West 49 

VI     The  Beginnings  of  Yv''orld  Dominion  ...       60 

B.  Plutocracy. 

VII     The  Struggle  for  Wealth  and  Power       .     .       74 

VIII     Their  United  States 88 

IX     The  Divine  Right  of  Property      ....     103 


CONTENTS— Continued 


PART  III 

MANIFEST  DESTINY. 

CHAPTER  PAGE 

X    Industrial  Empires 120 

XI     The  Great  War 143 

XII     The  Imperial  Highroad 158 

PART  IV 

THE  UNITED  STATES— A  WORLD  EMPIRE. 

XIII  The  United  States  as  a  World  Competitor    .  177 

XIV  The  Partition  of  the  Earth 192 

XV     Pan-Americanism 202 

XVI     The  American  Capitalist  and  World  Empire  218 

PARTY 
THE  CHALLENGE  TO  IMPERIALISM. 

XVII     The  New  Imperial  Alignment       ....  229 

XVIII     The  Challenge  in  Europe 243 

XIX    The  American  Worker  and  World  Empire  .  256 


The  American  Empire 


I.    THE  PROMISE  OF  1776 

1.  The  American  Repuhlic 

The  genius  of  revolution  presided  at  the  birth  of  the 
American  Republic,  whose  first  breath  was  drawn  amid  the 
economic,  social  and  political  turmoil  of  the  eighteenth  cen- 
tury. The  voyaging  and  discovering  of  the  three  preced- 
ing centuries  had  destroyed  European  isolation  and  laid 
the  foundation  for  a  new  world  order  of  society.  The  In- 
dustrial Revolution  was  convulsing  England  and  threaten- 
ing to  destroy  the  Feudal  State.  Western  civilization,  in 
the  birthpangs  of  social  revolution,  produced  first  the  Amer- 
ican and  then  the  French  Republic. 

Feudalism  was  dying !  Divine  right,  monarchy,  aris- 
tocracy, oppression,  despotism,  tyranny — these  and  all 
other  devils  of  the  old  world  order  were  bound  for  the 
limbo  which  awaits  outworn,  discredited  social  institutions. 
The  Declaration  of  Independence  officially  proclaimed  the 
new  order, — challenging  "divine  right"  and  maintaining 
that  "all  men  are  created  equal;  that  they  are  endowed 
by  their  Creator  with  certain  unalienable  rights;  that 
among  these  are  life,  liberty  and  the  pursuit  of  happiness. 
That  to  secure  these  rights,  governments  are  instituted 
among  men,  deriving  their  just  powers  from  the  consent 
of  the  governed. ' ' 

Life,  liberty  and  happiness  were  the  heritage  of  the  hu- 
man race,  and  * '  whenever  any  form  of  government  becomes 
destructive  of  these  ends,  it  is  the  right  of  the  people  to 
alter  or  abolish  it,  and  to  institute  a  new  government  lay- 
ing its  foundations  on  such  principles,  and  organizing  its 


THE  AMERICAN  EMPIRE 


powers  in  such  form,  as  to  them  shall  seem  likely  to  effect 
their  safety  and  happiness." 

Thus  the  rights  of  the  people  were  declared  superior  to 
the  privileges  of  the  rulers;  revolution  was  justified;  and 
the  principles  of  eighteenth  century  individualism  were 
made  the  foundation  of  the  new  political  state.  Aristoc- 
racy was  swept  aside  and  in  its  stead  democracy  was  en- 
throned. 

2.  The  Yearning  for  Liberty 

The  nineteenth  century  re-echoed  vnth  the  language  of 
social  idealism.  Traditional  bonds  were  breaking;  men's 
minds  were  freed;  their  imaginations  were  kindled;  their 
spirits  were  possessed  by  a  gnawing  hunger  for  justice  and 
truth. 

Revolting  millions  shouted:  ''Liberty,  Equality,  Fra- 
ternity!" Sages  mused;  philosophers  analyzed;  prophets 
exhorted ;  statesmen  organized  toward  this  end. 

Men  felt  the  fire  of  the  new  order  burning  in  their  vitals. 
It  purged  them.  They  looked  into  the  eyes  of  their  fellows 
and  saw  its  reflection.  Dreaming  of  liberty  as  a  maiden 
dreams  of  her  lover,  humanity  awoke  suddenly,  to  find 
liberty  on  the  threshold. 

Through  the  ages  mankind  has  sought  trutli  and  justice. 
Vested  interests  have  intervened.  The  powers  of  the  es- 
tablished order  have  resisted,  but  the  search  has  continued. 
That  eternal  vigilance  and  eternal  sacrifice  which  are  the 
price  of  liberty,  are  found  wherever  human  society  has  left 
a  record.  At  one  point  the  forces  of  light  seem  to  be 
Avinning.  At  another,  liberty  and  truth  are  being  ruth- 
lessly crushed  by  the  privileged  masters  of  life.  The 
struggle  goes  on — eternally. 

Liberty  and  justice  are  ideals  that  exist  in  the  human 
heart,  but  they  are  none  the  less  real.  Indeed,  they  are 
in  a  sense  more  potent,  lying  tluis  in  immortal  embryo, 
than  they  could  be  as  tangible  institutions.     Institutions 


THE  AMERICAN  EMPIRE 


are  brought  into  being,  perfected,  kept  past  their  time  of 
highest  usefulness  and  finally  discarded.  The  hopes  of  men 
spring  eternally,  spontaneously.  They  are  the  true  social 
immortality. 


3.  Government  of  the  People 

Feudalism  as  a  means  of  organizing  society  had  failed. 
The  newly  declared  liberties  were  confided  to  the  newly 
created  state.  It  was  political  democracy  upon  which  the 
founders  of  the  Republic  depended  to  make  good  the 
promise  of  1776. 

The  American  colonists  had  fled  to  escape  economic, 
political  and  religious  tyranny  in  the  mother  countries. 
They  had  drunk  the  cup  of  its  bitterness  in  the  long  contest 
with  England  over  the  rights  of  taxation,  of  commerce,  of 
manufacture,  and  of  local  political  control.  They  had 
their  fill  of  a  mastery  built  upon  the  special  privilege  of 
an  aristocratic  minority.  It  was  liberty  and  justice  they 
sought  and  democracy  was  the  instrument  that  they  selected 
to  emancipate  themselves  from  the  old  forms  of  privilege 
and  to  give  to  all  an  equal  opportunity  for  life,  liberty  and 
the  pursuit  of  happiness. 

Political  democracy  was  to  place  the  management  of 
community  business  in  the  hands  of  the  people — to  give 
them  liberty  in  the  control  of  public  affairs.  The  highest 
interest  of  democracy  was  to  be  the  interest  of  the  people. 
There  could  be  no  higher  interest  because  the  people  were 
supreme.  The  people  were  to  select  the  public  servants; 
direct  their  activities;  determine  public  policy;  prescribe 
the  law;  demand  its  enforcement;  and  if  need  be  assert 
their  superior  authority  over  any  part  of  the  government, 
not  excepting  the  constitution.^ 

1  "It  is,  Sir,  the  people's  constitution,  the  people's  government, 
made  for  the  people,  made  by  the  people,  and  answerable  to  the  peo- 
ple."— Daniel  Webster's  reply  to  Hayne,  1830.  "Speeches  and  Ora- 
tions."    E.  P.  Whipple,  Boston.  Little,  Brown  and  Co.,  p.  257. 


10  THE  AMERICAN  EMPIRE 


Democracy,  in  politics,  was  based  on  the  idea  that  public 
affairs  could  best  be  run  by  the  public  voice.  However  ex- 
pert may  be  the  hand  that  administers  the  laws,  the  hand 
and  the  heart  that  renders  the  final  decision  in  large  ques- 
tions must  belong  to  the  public.^ 

The  people  who  laid  the  foundations  for  democracy  in 
France  and  the  United  States  feared  tyranny.  They  and 
their  ancestors  had  been,  for  centuries,  the  victims  of 
governmental  despotism.  They  were  on  their  guard  con- 
stantly against  governmental  aggression  in  any  form.  And 
they,  therefore,  placed  the  strictest  limitations  upon  the 
powers  that  governments  should  enjoy. 

Special  privilege  government  was  run  by  a  special  class, 
— the  hereditary  aristocracy — in  the  interest  and  for  the 
profit  of  that  class.  They  held  the  wealth  of  the  nation — • 
the  land — and  lived  comfortably  upon  its  produce.  They 
never  worked — no  gentleman  could  work  and  remain  a 
gentleman.  They  carried  on  the  affairs  of  the  court — some- 
times well,  sometimes  badly;  maintained  an  extravagant 
scale  of  social  life ;  built  up  a  vicious  system  of  secret  inter- 
national diplomacy ;  commanded  in  time  of  war,  and  at  all 
times;  levied  rents  and  taxes  which  went  very  largely  to 
increase  their  own  comfort  and  better  their  own  position  in 
life.  The  machinery  of  government  and  the  profits  from 
government  remained  in  the  hands  of  this  one  class. 

Class  government  from  its  very  nature  could  not  be 
other  than  oppressive.  "All  hereditary  government  over 
a  people  is  to  them  a  species  of  slavery  and  representative 
government  is  freedom."  "All  hereditary  government  is 
in  its  nature  tyranny.  ...  To  inherit  a  government  is  to 
inherit  the  people  as  if  they  were  flocks  and  herds. ' '  ^ 


2  Tom  Paine  held  ardently  to  this  doctrine,  "It  is  always  the  in- 
terest of  a  far  greater  number  of  people  in  a  Nation  to  have  things 
right  than  to  let  them  remain  wrong;  and  wlicn  public  matters  are 
open  to  debate,  and  the  public  judgment  free,  it  Mall  not  decide 
wrong  unless  it  decides  too  hastily!"  "Rights  of  Man,"  Part  II, 
Ch.  4. 

3  "Rights  of  Man,"  Thomas  Paine.     Part  IT,  Chapter  3. 


THE  AMERICAN  EMPIRE  11 


4.  The  Source  of  Authority 

The  people  were  to  be  the  source  of  authority  in  the 
new  state.  The  citizen  was  to  have  a  voice  because  he  was 
an  adult,  capable  of  rendering'  judgment  in  the  selection 
of  public  servants  and  in  the  determination  of  public 
policy. 

All  through  history  there  had  been  men  into  whose  hands 
supreme  power  had  been  committed,  who  had  carried  this 
authority  with  an  astounding  degree  of  wisdom  and  in- 
tegrity. For  every  one  who  had  comported  himself  with 
such  wisdom  in  the  presence  of  supreme  authority,  there 
were  a  score,  or  more  likely  a  hundred,  who  had  used  this 
power  stupidly,  foolishly,  inefficiently,  brutally  or  viciously. 

Few  men  are  good  enough  or  wise  enough  to  keep  their 
heads  while  they  hold  in  their  hands  unlimited  authority 
over  their  fellows.  The  pages  of  human  experience  were 
written  full  of  the  errors,  failures,  and  abuses  of  which 
such  men  so  often  have  been  guilty. 

The  new  society,  in  an  effort  to  prevent  just  such  trans- 
gressions of  social  well  being,  placed  the  final  power  to 
decide  public  questions  in  the  hands  of  the  people.  It  was 
not  contended,  or  even  hoped  that  the  people  would  make 
no  mistakes,  but  that  the  people  would  make  fewer  mis- 
takes and  mistakes  less  destructive  of  public  well-being 
than  had  been  made  under  class  government.  At  least 
this  much  was  gained,  that  the  one  who  abused  power  must 
first  secure  it  from  those  whom  he  proposed  to  abuse,  and 
must  later  exercise  it  unrestrained  to  the  detriment  of  those 
from  whom  the  power  was  derived  and  in  whom  it  still 
resided. 

The  citizen  was  to  be  the  source  of  authority.  His  word, 
combined  with  that  of  the  majority  of  his  fellows,  was  final. 
He  delegated  authority.  He  assented  to  laws  which  were 
administered  over  all  men,  including  himself.  He  accepts 
the  authority  of  which  he  was  the  source. 


12  THE  AMERICAN  EMPIRE 


5.  The  American  Tradition 

This  was  the  American  tradition.  This  was  the  language 
of  the  new,  free  world.  Life,  liberty  and  happiness; 
popular  sovereignity;  equal  opportunity.  This,  to  the 
people  of  the  old  countries  was  the  meaning  of  America. 
This  was  the  promise  of  1776. 

When  President  Wilson  went  to  Europe,  speaking  the 
language  of  liberty  that  is  taught  in  every  American  school- 
room, the  plain  people  turned  to  him  with  supreme  con- 
fidence. To  them  he  was  the  embodiment  of  the  spirit  of 
the  West. 

Native-bom  Americans  hold  the  same  idea.  To  them  the 
Declaration  of  Independence  was  a  final  break  with  the  old 
order  of  monarchical,  imperial  Europe.  It  was  the 
charter  of  popular  rights  and  human  liberties,  establishing 
once  for  all  the  principles  of  self-government  and  equal 
opportmiity. 

The  Statue  of  Liberty,  guarding  the  great  port  of  en- 
trance to  America,  symbolizes  the  spirit  in  which  foreigners 
and  natives  alike  think  of  her — as  the  champion  of  the  weak 
and  the  oppressed;  the  guardian  of  justice;  the  standard- 
bearer  of  freedom. 

This  spirit  of  America  is  treasured  to-day  in  the  hearts 
of  millions  of  her  citizens.  To  the  masses  of  the  American 
people  America  stands  to-day  as  she  always  stood.  They 
believe  in  her  freedom;  they  boast  of  her  liberties;  they 
have  faith  in  her  great  destiny  as  the  leader  of  an  emanci- 
pated world.  They  respond,  as  did  their  ancestors,  to  the 
great  truths  of  liberty,  equality,  and  fraternity  that  in- 
spired the  eighteenth  century. 

The  tradition  of  America  is  a  hope,  a  faith,  a  conviction, 
a  burning  endeavor,  centering  in  an  ideal  of  liberty  and 
justice  for  the  human  race. 

Patrick  Henry  voiced  this  ideal  when,  a  passionate  ap- 
peal for  freedom  being  interrupted  by  cries  of  "Treason, 


THE  AMERICAN  EMPIRE  13 


treason!"  he  faced  the  objector  with  the  declaration,  "If 
this  be  treason,  make  the  most  of  it ! " 

Eighteenth  century  Europe,  struggling  against  religious 
and  political  tyranny,  looked  to  America  as  the  land  of 
Freedom.  America  to  them  meant  liberty.  "What  Athens 
was  in  miniature,  America  will  be  in  magnitude,"  wrote 
Tom  Paine.  ' '  The  one  was  the  wonder  of  the  ancient  world ; 
the  other  is  becoming  the  admiration,  the  model  of  the 
present."  ("The  Rights  of  Man,"  Part  II,  Chapter  3.) 
The  promise  of  1776  was  voiced  by  men  who  felt  a  con- 
suming passion  for  freedom ;  a  divine  discontent  with  any- 
thing less  than  the  highest  possible  justice;  a  hatred  of 
tyranny,  oppression  and  every  form  of  special  privilege 
and  vested  wrong.  They  yearned  over  the  future  and 
hoped  grandly  for  the  human  race. 


14  ,THE  AMERICAN  EMPIRE 


II.    ^'HE  COURSE  OF  EMPIRE 

1.  Promise  and  Fulfillment 

A  VAST  gulf  yawns  between  the  inspiring  promise  that 
a  handful  of  men  and  women  made  to  the  world  in  1776, 
and  the  fulfillment  of  that  promise  that  is  embodied  in 
twentieth  century  American  life.  The  pre-war  indifference 
to  the  loss  of  liberty;  the  gradual  encroachments  on  the 
rights  of  free  speech,  and  free  assemblage  and  of  free  press ; 
the  war-time  suppressions,  tyrannies,  and  denials  of  justice ; 
the  subsequent  activities  of  city,  state,  and  national  legis- 
latures and  executives  in  passing  and  enforcing  laws  that 
provided  for  military  training  in  violation  of  conscience, 
the  denial  of  freedom  of  belief,  of  thought,  of  speech,  of 
press  and  of  assemblage, — activities  directed  specifically  to 
the  negation  of  those  very  principles  of  liberty  which  have 
constituted  so  intimate  a  part  of  the  American  tradition  of 
freedom, — form:  a  contrast  between  the  promise  of  1776  and 
the  twentieth  century  fulfillment  of  that  promise  which  is 
brutal  in  its  terrible  intensity. 

Many  thoughtful  Americans  have  been  baffled  by  this  con- 
flict between  the  aims  of  the  eighteenth  century  and  the 
accomplishments  of  the  twentieth.  The  facts  they  admit. 
For  explanation,  either  they  may  say,  "It  was  the  war," 
implying  that  with  the  cessation  of  hostilities  and  the  re- 
turn to  a  peace  basis,  the  situation  has  undergone  a  radical 
change ;  or  else  they  blame  some  individual  or  some  organi- 
zation for  the  extinction  of  American  liberties. 

Great  consequences  arise  from  great  causes.  A  general 
break-down  of  liberties  cannot  be  attributed  to  individual 
caprice  nor  to  a  particular  legislative  or  judical  act. 

The  denial  of  liberty  in  the  United  States  is  a  matter  of 
of  large  import.  No  mayor,  governor,  president,  legis- 
lature, court,  magnate,  banker,  corporation  or  trusty  and 


THE  AMERICAN  EMPIRE  15 


no  combination  of  these  individuals  and  organizations  could 
arbitrarily  destroy  the  American  Republic.  Underneath 
personality  and  partisanship  are  working  the  forces  which 
have  stripped  the  American  people  of  their  essential  liber- 
ties as  the  April  sun  strips  the  mountains  of  their  snow. 

No  one  can  read  the  history  of  the  United  States  since 
the  drafting  of  the  Declaration  of  Independence  without 
being  struck  by  the  complete  transformation  in  the  forms 
of  American  life.  The  Industrial  Revolution  which  had 
gripped  England  for  half  a  century,  made  itself  felt  in  the 
United  States  after  1815.  Steam,  transportation,  indus- 
trial development,  city  life,  business  organization,  expansion 
across  the  continent — these  are  the  factors  that  have  made 
of  the  United  States  a  nation  utterly  apart  from  the  nation 
of  which  those  who  signed  the  Declaration  of  Independence 
and  fought  the  Revolution  dreamed. 

These  economic  changes  have  brought  political  changes. 
The  American  Republic  has  been  thrust  aside.  Above  its 
remains  towers  a  mighty  imperial  structure, — the  world  of 
business, — bulwarked  by  usage  and  convention;  safe- 
guarded by  legislation,  judical  interpretation,  and  the 
whole  power  of  organized  society.  That  structure  is  the 
American  Empire — as  real  to-day  as  the  Roman  Empire  in 
the  days  of  Julius  Caesar;  the  French  Empire  under  the 
Little  Corporal,  or  the  British  Empire  of  the  Great  Com- 
moner, William  E.  Gladstone. 

Approved  or  disapproved;  exalted  or  condemned;  the 
fact  of  empire  must  be  evident  even  to  the  hasty  observer. 
The  student,  tracing  its  ramifications,  realizes  that  the 
structure  has  been  building  for  generations. 


2.  The  Characteristics  of  Empire 

Many  minds  will  refuse  to  accept  the  term  "empire" 
as  applied  to  a  republic.  Accustomed  to  link  ** empire" 
with  "emperor,"  they  conceive  of  a  supreme  hereditary 
ruler  as  an  essential  part  of  imperial  life.     A  little  re- 


16  THE  AMERICAN  EMPIRE 

flection  will  show  the  inadequacy  of  such  a  concept.  ' '  The 
British  Empire"  is  an  official  term,  used  by  the  British 
Government,  although  Great  Britian  is  a  limited  monarchy, 
whose  king  has  less  power  than  the  President  of  the  United 
States,  On  the  other  hand,  eastern  potentates,  who  ex- 
ercise absolute  sway  over  their  tiny  dominions  do  not  rule 
' '  empires. ' ' 

Recent  usage  has  given  the  term  "empire"  a  very  definite 
meaning,  which  refers,  not  to  an  ''emperor"  but  to  certain 
relations  between  the  parts  of  a  political  or  even  of  an 
economic  organization.  The  earlier  uses  of  the  word  "em- 
pire" were,  of  course,  largely  political.  Even  in  that 
political  sense,  however,  an  "empire"  does  not  necessarily 
imply  the  domain  of  an  "  emperor. ' ' 

According  to  the  definition  appearing  in  the  "New  Eng- 
lish Dictionary"  wherever  "supreme  and  extensive  politi- 
cal dominion"  is  exercised  "by  a  sovereign  state  over  its 
dependencies"  an  empire  exists.  The  empire  is  "an 
aggregaton  of  subject  territories  ruled  over  by  a  sovereign 
state."  The  terms  of  the  definition  are  political,  but  it 
leaves  the  emperor  entirely  out  of  account  and  makes  an 
empire  primarily  a  matter  of  organization  and  not  of 
personality. 

During  the  last  fifty  years  colonialism,  the  search  for 
foreign  markets,  and  the  competition  for  the  control  of 
"undeveloped"  countries  has  brought  the  words  "empire" 
and  "imperialism"  into  a  new  category,  where  they  relate, 
not  to  the  ruler — ^be  he  King  or  Emperor — but  to  the  ex- 
tension of  commercial  and  economic  interests.  The  "fi- 
nancial imperialism"  of  P.  C.  Howe  and  the  "imperialism" 
of  J.  A,  Hobson  are  primarily  economic  and  only  in- 
cidentally political. 

"Empire"  conveys  the  idea  of  widespread  authority, 
dominion,  rule,  subjugation.  Formerly  it  referred  to 
political  power;  to-day  it  refers  to  economic  power.  In 
either  case  the  characteristics  of  empire  are, — 

1.  Conquered  territory. 


THE  AMERICAN  EMPIRE  17 

2.  Subject  peoples. 

3.  An  imperial  or  ruling  class. 

4.  The  exploitation  of  the  subject  peoples  and  the  con- 
quered territory  for  the  benefit  of  the  ruling  class. 

Wherever  these  four  characteristics  of  imperial  organi- 
zation exist,  there  is  an  empire,  in  all  of  its  essential 
features.  They  are  the  acid-test,  by  which  the  presence  of 
empire  may  be  determined. 

Names  count  for  nothing.  Rome  was  an  empire,  while 
she  still  called  herself  a  republic.  Napolean  carried  on  hia 
imperial  activities  for  years  under  the  authority  of  Repub- 
lican France.  The  existence  of  an  empire  depends,  not 
upon  the  presence  of  an  "emperor"  but  upon  the  presence 
of  those  facts  which  constitute  Empire, — conquered  terri- 
tory ;  subject  peoples ;  an  imperial  class ;  exploitation  by  and 
for  this  class.  If  these  facts  exist  in  Russia,  Russia  is  an 
empire ;  if  they  are  found  in  Germany,  Germany  is  an  em- 
pire ;  if  they  appear  in  the  United  States,  the  United  Statea 
is  an  empire  none  the  less  surely, — traditions,  aspirationa 
and  public  convictioix  to  the  contrary  notwithstanding. 


3.  The^  Preservation  of  Empire 

The  first  business  of  an  imperial  class  is  the  preservation 
of  the  empire  to  which  it  owes  its  advantages  and  privileges. 
Therefore,  in  its  very  essence,  imperialism  is  opposed  to 
popular  government.  "The  greatest  good  to  the  greatest 
number"  is  the  ideal  that  directs  the  life  of  a  self-govern- 
ing community.  "The  safety  and  happiness  of  the  ruling 
class"  is  the  first  principle  of  imperial  organization. 

Imperialism  is  so  generally  recognized  and  so  widely 
accepted  as  a  mortal  foe  of  popular  government  that  the 
members  of  an  imperial  class,  just  rising  into  power,  are 
always  careful  to  keep  the  masses  of  the  people  ignorant  of 


18  THE  AMERICAN  EMPIRE 


the  true  course  of  events.  This  necessity  explains  the  long 
period,  in  the  history  of  many  great  empires,  when  the 
name  and  forms  of  democracy  were  preserved,  after  the 
imperial  structure  had  been  established  on  solid  foundations. 
Slow  changes,  carefully  directed  and  well  disguised,  are 
necessary  to  prevent  outraged  peoples  from  rising  against 
an  imperial  order  when  they  discover  how  they  have  been 
sold  into  slavery.  Even  with  all  of  the  safeguards,  under 
the  control  of  the  ablest  statesmen,  Caesar  frequently  meets 
his  Brutus. 

The  love  of  justice ;  the  yearning  for  liberty ;  the  sense  of 
fair  play;  the  desire  to  extend  opportunity,  all  operate 
powerfully  upon  those  to  whom  the  principles  of  self- 
government  are  dearest,  leading  them  to  sacrifice  position, 
economic  advantage,  and  sometimes  life  itself  for  the  sake 
of  the  principles  to  which  they  have  pledged  their  faith. 

Therein  lies  what  is  perhaps  one  of  the  most  essential 
differences  between  popular  government  and  empire.  The 
former  rests  upon  certain  ideas  of  popular  rights  and 
liberties.  The  latter  is  a  weapon  of  exploitation  in  the 
hands  of  the  ruling  class.  Popular  government  lies  in  the 
hopes  and  beliefs  of  the  people.  Empire  is  the  servant  of 
ambition  and  the  shadow  of  greed.  Popular  government 
has  been  evolved  by  the  human  race  at  an  immense 
sacrifice  during  centuries  of  struggle  against  the  forms  and 
ideas  that  underly  imperialism.  Since  men  have  set  their 
backs  on  the  past  and  turned  their  faces  with  resolute  hope 
to  the  future,  empire  has  repelled  them,  while  democracy 
has  called  and  beckoned. 

Empires  have  been  made  possible  by  "bread  and  cir- 
cuses"; by  appealing  to  an  abnormally  developed  sense  of 
patriotism ;  by  the  rule  of  might  where  largess  and  cajolery- 
have  failed.  Rome,  Germany  and  Britain  are  excellent  ex- 
amples of  these  three  methods.  In  each  case,  millions  of 
citizens  have  had  faith  in  the  empire,  believing  in  its 
promise  of  glory  and  of  victory ;  but  on  the  other  hand,  this 
belief  could  be  maintained  only  by  a  continuous  propa- 
ganda— triumphs  in  Rome,  school-books  and  "boilerplate" 


THE  AMERICAN  EMPIRE  19 


in  Germany  and  England.  Even  then,  the  imperial  class  is 
none  too  secure  in  its  privileges.  Always  from  the  abysses 
of  popular  discontent,  there  arises  some  Spartacus,  some 
Liebknecht,  some  Smillie,  crying  that  ''the  future  belongs 
to  the  people." 

The  imperial  class,  its  privileges  unceasingly  threatened 
by  the  popular  love  of  freedom — devotes  not  a  little  atten- 
tion to  the  problem  of  "preserving  law  and  order"  by 
suppressing  those  who  speak  in  the  name  of  liberty,  and 
by  carrying  on  a  generous  advertising  campaign,  the  object 
of  which  is  to  persuade  the  people  of  the  advantages  which 
they  derive  from  imperial  rule. 

During  the  earlier  stages  in  the  development  of  empire, 
the  imperial  class  is  able  to  keep  itself  and  its  designs  in  the 
background.  As  time  passes,  however,  the  power  of  the 
imperialist  becomes  more  and  more  evident,  until  some 
great  crisis  forces  the  empire  builders  to  step  out  into  the 
open.  They  then  appear  as  the  frank  apologists,  spokes- 
men and  defenders  of  the  order  for  which  they  have  so 
faithfully  labored  and  from  which  they  expect  to  gain  so 
much. 

Finally,  the  ambition  of  some  aggressive  leader  among 
the  imperialists,  or  a  crisis  in  the  affairs  of  the  empire  leads 
to  the  next  step — the  appointment  of  a  "dictator,"  "su- 
preme ruler"  or  "emperor."  This  is  the  last  act  of  the 
imperial  drama.  Henceforth,  the  imperial  class  divides  its 
attention  between, — 

1.  The  suppression  of  agitation  and  revolt  among  the 
people  at  home; 

2.  Maintaining  the  imperial  sway  over  conquered  terri- 
tory; 

3.  Extending  the  boundaries  of  the  empire  and 

4.  The  unending  struggle  between  contending  factions 
of  the  ruling  class  for  the  right  to  carry  on  the  work 
of  exploitation  at  home  and  abroad. 


20  THE  AMERICAN  EMPIRE 


4.  The  Price  of  Empire 

Since  the  imperial  or  ruling  class  is  willing  to  go  to  any 
lengths  in  order  to  preserve  the  empire  upon  which  its 
privileges  depend,  it  follows  that  the  price  of  empire  must 
be  reckoned  in  the  losses  that  the  masses  of  the  people 
suffer  while  safeguarding  the  privileges  of  the  few. 

As  a  matter  of  course,  conquered  and  dependent  people 
pay  with  their  liberty  for  their  incorporation  into  the  em- 
pire that  holds  dominion  over  them.  On  any  other  basis, 
empire  is  unthinkable.  Indeed  the  terms  "dependencies," 
"domination,"  and  "subject"  carry  with  them  only  one 
possible  implication — the  subordination  or  extinction  of  the 
liberties  of  the  peoples  in  question. 

The  imperial  class — a  minority — depends  for  its  con- 
tinued supremacy  upon  the  ownership  of  some  form  of 
property,  whether  this  property  be  slaves,  or  land,  or  in- 
dustrial capital.  As  Veblen  puts  it:  "The  emergence 
of  the  leisure  class  coincides  with  the  beginning  of  owner- 
ship." ("Theory  of  the  Leisure  Class,"  T.  Veblen,  New 
York.  B.  W.  Huebsch,  1899,  p.  22.)  Necessarily,  there- 
fore, the  imperial  class  will  sacrifice  the  so-called  human  or 
personal  rights  of  the  home  population  to  the  protection  of 
its  property  rights.  Indeed  the  property  rights  come  to  be 
regarded  as  the  essential  human  rights,  although  there  is 
but  a  small  minority  of  the  community  that  can  boast  of  the 
possession  of  property. 

The  superiority  of  ruling  class  property  rights  over  the 
personal  rights  and  liberties  of  the  inhabitants  in  a  subject 
territory  is  taken  as  a  matter  of  course.  Even  in  the  home 
country,  where  the  issue  is  clearly  made,  the  imperial  class 
will  sacrifice  the  happiness,  the  health,  the  longevity,  and 
the  lives  of  the  propertyless  class  in  the  interest  of  "law 
and  order"  and  "the  protection  of  property."  The  stories 
of  the  Roman  populace;  of  the  French  peasants  under 
Louis  XIV;  of  the  English  factory  workers  (men,  women 
and  children)  during  the  past  hundred  years,  and  of  the  low 
skilled  workers  in  the  United  States  since  the  Civil  War, 


THE  AMERICAN  EMPIRE  21 


furnish  ample  proof  of  the  correctness  of  this  contention. 
The  life,  liberty  and  happiness  of  the  individual  citizen  is 
a  matter  of  small  importance  so  long  as  the  empire  is  saved. 

A  crisis  in  imperial  affairs  is  always  regarded,  by  the 
ruling  class,  as  a  legitimate  reason  for  curtailing  the  rights 
of  the  people.  Under  ordinary  circumstances,  the  imperial 
class  will  gain  rather  than  lose  from  the  exercise  of  "popu- 
lar liberties."  Indeed,  the  exercise  of  these  liberties  is  of 
the  greatest  assistance  in  convincing  the  people  that  they 
are  enjoying  freedom  and  thus  keeping  them  satisfied  with 
their  lot.  But  in  a  period  of  turmoil,  with  men's  hearts 
stirred,  and  their  souls  aflamed  with  conviction  and  ideal- 
ism, there  is  always  danger  that  the  people  may  exercise 
their  "unalienable  right"  to  "alter  or  abolish"  their  form 
of  government.  Consequently,  during  a  crisis,  the  im- 
perial class  takes  temporary  charge  of  popular  liberties. 
Every  great  empire  engaged  in  the  recent  war  passed 
through  such  an  experience.  In  each  country  the  ruling 
class  announced  that  the  war  was  a  matter  of  life  and 
death.  Papers  were  suppressed  or  censored;  free  speech 
was  denied;  men  were  conscripted  against  will  and  con- 
science ;  constitutions  were  thrust  aside ;  laws  "slumbered" ; 
•wi'iters  and  thinkers  were  jailed  for  their  opinions;  food 
was  rationed ;  industries  were  controlled — all  in  the  interest 
of  "winning  the  war."  After  the  war  was  won,  the  victors 
practiced  an  even  more  rigorous  suppression  while  they 
were  "making  the  peace."  Then  followed  months  and 
years  of  protests  and  demands,  until,  one  by  one,  the 
liberties  were  retaken  by  the  people  or  else  the  war-tyranny, 
once  firmly  established,  became  a  part  of  "the  heritage  of 
empire."  In  such  cases,  where  liberties  were  not  regained, 
the  plain  people  learned  to  do  without  them. 

Liberty  is  the  price  of  empire.  Imperialism  presupposes 
that  the  people  will  be  willing,  at  any  time,  to  surrender 
their  "rights"  at  the  call  of  the  rulers. 


22  THE  AMERICAN  EMPIRE 


5.  The  Vniversality  of  Empire 

Imperialism  is  not  new,  nor  is  it  confined  to  one  nation 
or  to  one  race.  On  the  contrary  it  is  as  old  as  history  and 
as  wide  as  the  world. 

Before  Rome,  there  was  Carthage.  Before  Carthage, 
there  were  Greece,  Macedonia,  Egypt,  Assyria,  China. 
Where  history  has  a  record,  it  is  a  record  of  empire. 

During  modem  times,  international  affairs  have  been 
dominated  by  empires.  The  great  war  was  a  war  between 
empires.  During  the  first  three  years,  the  two  chief  con- 
testants were  the  British  Empire  on  the  one  hand  and  the 
German  Empire  on  the  other.  Behind  these  leaders  were 
the  Russian  Empire,  the  Italian  Empire,  the  French  Em- 
pire, and  the  Japanese  Empire. 

The  Peace  of  Versailles  was  a  peace  between  empires. 
Five  empires  dominated  the  peace  table — Great  Britain, 
France,  Italy,  Japan  and  the  United  States.  The  avowedly 
anti-imperial  nations  of  Europe — Russia  and  Hungary — 
were  not  only  excluded  from  the  deliberations  of  the  Peace 
Table,  but  were  made  the  object  of  constant  diplomatic, 
military  and  economic  aggression  by  the  leading  imperial- 
ist nations. 

6.  The  Evolution  of  Empire 

Empires  do  not  spring,  full  grown,  from  the  surroundings 
of  some  great  historic  crisis.  Rather  they,  like  all  other 
social  institutions,  are  the  result  of  a  long  series  of  changes 
that  lead  by  degrees  from  the  pre-imperial  to  the  imperial 
stage.  Many  of  the  great  empires  of  the  past  two  thousand 
years  have  begun  as  republics,  or,  as  they  are  sometimes 
called,  ** democracies,"  and  the  processes  of  transformation 
from  the  republican  to  the  imperial  stage  have  been  so 
gradual  that  the  great  mass  of  the  people  were  not  aware 
that  any  change  had  occurred  until  the  emperor  ascended 
the  throne. 


THE  AMERICAN  EMPIRE  23 


The  development  of  empire  is  of  necessity  a  slow  process. 
There  are  the  dependent  people  to  be  subjected;  the  terri- 
tory to  conquered ;  the  imperial  class  to  be  built  up.  This 
last  process  takes,  perhaps,  more  time  than  either  of  the 
other  two.  Class  consciousness  is  not  created  in  a  day.  It 
requires  long  experience  with  the  exercise  of  imperial  power 
before  the  time  has  come  to  proclaim  an  emperor,  and  forci- 
bly to  take  possession  of  the  machinery  of  public  affairs. 

7.  The  United  States  and  the  Stages  of  Empire 

Any  one  who  is  familiar  with  its  history  will  realize  at 
once  that  the  United  States  is  passing  through  some  of  the 
more  advanced  stages  in  the  development  of  empire.  The 
name  ''Republic"  still  remains;  the  traditions  of  the  Re- 
public are  cherished  by  millions;  the  republican  forms  are 
almost  intact,  but  the  relations  of  the  United  States  to 
its  conquered  territory  and  its  subject  peoples;  the  rapid 
maturation  of  the  plutocracy  as  a  governing  class  or  caste ; 
the  shamelessness  of  the  exploitation  in  which  the  rulers 
have  indulged;  and  the  character  of  the  forces  that  are 
now  shaping  public  policy,  proclaim  to  all  the  world  the 
fact  of  empire. 

The  chief  characteristics  of  empire  exist  in  the  United 
States.  Here  are  conquered  territory;  subject  peoples; 
an  imperial,  ruling  class,  and  the  exploitation  by  that  class 
of  the  people  at  home  and  abroad.  During  generations 
the  processess  of  empire  have  been  working,  unobserved, 
in  the  United  States.  Through  more  than  two  centuries  the 
American  people  have  been  busily  laying  the  foundations 
and  erecting  the  imperial  structure.  For  the  most  part, 
they  have  been  unconscious  of  the  work  that  they  were 
doing,  as  the  dock  laborer,  is  ordinarily  unconscious  of  his 
part  in  the  mechanism  of  industry.  Consciously  or  uncon- 
sciously, the  American  people  have  reared  the  imperial 
structure,  until  it  stands,  to-day,  imposing  in  its  grandeur, 
upon  the  spot  where  many  of  the  founders  of  the  American 
government  hoped  to  see  a  republic. 


24  THE  AMERICAN  EMPIRE 


»  The  entrance  of  the  United  States  into  the  war  did  not 
greatly  alter  the  character  of  the  forces  at  work,  nor  did 
it  in  any  large  degree  change  the  direction  in  which  the 
country  was  moving.  Rather,  it  brought  to  the  surface 
of  public  attention  factors  of  American  life  that  had  been 
evolving  unnoticed,   for  generations. 

The  world  situation  created  by  the  war  compelled  the 
American  imperial  class  to  come  out  in  the  open  and  to  oc- 
cupy a  position  that,  while  wholly  inconsistent  with  the 
traditions  of  American  life,  is  nevertheless  in  keeping 
with  the  demands  of  imperial  necessity.  The  ruling  class 
in  the  United  States  has  taken  a  logical  step  and  has  made 
a  logical  stand.  The  masters  of  American  life  have  done 
the  only  thing  that  they  could  do  in  the  interests  of  the 
imperial  forces  that  they  represent.  They  are  the  victims, 
as  much  as  were  the  Kaiser  and  the  Czar  on  the  one  hand, 
and  the  Belgians  and  the  Serbs  on  the  other,  of  that  im- 
perial necessity  that  knows  no  law  save  the  preservation  of 
its  own  most  sacred  interests. 

Certain  liberal  American  thinkers  have  taken  the  stand 
that  the  incidents  of  1917-1918  were  the  result  of  the 
failure  of  the  President,  and  of  certain  of  his  advisers,  to 
follow  the  theories  which  he  had  enunciated,  and  to  stand 
by  the  cause  that  he  had  espoused.  These  critics  over- 
look the  incidental  character  of  the  war  as  a  factor  in 
American  domestic  policy.  The  war  never  assumed  any- 
thing like  the  importance  in  the  United  States  that  it  did 
among  the  European  belligerents.  On  the  surface,  it  cre- 
ated a  furore,  but  underneath  the  big  fact  staring  the 
administration  in  the  face  was  the  united ,  front  of  the 
business  interests,  and  their  organized  demands  for  action. 
The  far-seeing  among  the  business  men  realized  that  the 
plutocratic  structure  the  world  over  was  in  peril,  and  that 
the  fate  of  the  whole  imperial  regime  was  involved  in  the 
European  struggle.  The  Russian  Revolution  of  March 
1917  was  the  last  straw.  From  that  time  on  the  entrance 
of  the  United  States  into  the  war  became  a  certainty  as 
the  only  means  of  "saving  (capitalist)  civilization." 


THE  AMERICAN  EMPIRE  25 


The  thoughtful  student  of  the  situation  in  the  United 
States  is  not  deceived  by  personalities  and  names.  He 
realizes  that  the  events  of  1917-1918  have  behind  them 
generations  of  causes  which  lead  logically  to  just  such 
results;  that  he  is  witnessing  one  phase  of  a  great  process 
in  the  life  of  the  American  nation — a  process  that  is  old  in 
its  principles  j^et  ever  new  in  its  manifestations. 

Traditional  liberties  have  always  given  way  before  im- 
perial necessity.  An  examination  of  the  situation  in  which 
the  ruling  class  of  the  United  States  found  itself  in  1917, 
and  of  the  forces  that  were  operating  to  determine  public 
policy,  must  convince  even  the  enthusiast  that  the  occur- 
rences of  1917  and  the  succeeding  years  were  the  logical 
outcome  of  imperial  necessity.  To  what  extent  that  ex- 
planation will  account  for  the  discrepancy  between  the 
promise  of  1776  and  the  twentieth  century  fulfillment  of 
that  promise  must  appear  from  a  further  examination  of 
the  evidence. 


26  THE  AMERICAN  EMPIRE 


III.     SUBJUGATING  THE  INDIANS 

1.  The  Conquering  Peoples 

The  first  step  in  the  establishment  of  empire — the  eon- 
quest  of  territory  and  the  subjugation  of  the  conquered 
populations, — was  taken  by  the  people  of  the  United  States 
at  the  time  of  their  earliest  settlements.  They  took  the 
step  naturally,  unaffectedly,  as  became  the  sons  of  their 
fathers. 

The  Spanish,  French  and  English  who  made  the  first 
settlement  in  North  America  were  direct  descendants  of 
the  tribes  that  have  swept  across  Europe  and  portions  of 
Asia  during  the  past  three  or  four  thousand  years.  These 
tribes,  grouped  on  the  basis  of  similarity  in  language  under 
the  general  term  "Aryan,"  hold  a  record  of  conquest  that 
fills  the  pages  of  written  history. 

Hunger;  the  pressure  of  surplus^'population ;  the  inrush 
of  new  hordes  of  invaders,  drove  them  on.  Ambition ;  the 
love  of  adventure;  the  lure  of  new  opportunities  in  new 
lands,  called  them  further.  Meliorism, — the  desire  to  better 
the  conditions  of  life  for  themselves  and  for  their  children 
— animated  them.  In  later  years  the  necessity  of  dispos- 
ing of  surplus  wealth  impelled  them.  Driven,  lured, 
coerced,  these  Aryan  tribes  have  inundated  the  earth. 
Passing  beyond  the  boundaries  of  Europe,  they  have 
crossed  the  seas  into  Africa,  Asia,  America  and  Australia. 

Among  the  Aryans,  after  bitter  strife,  the  Teutons  have 
attained  supremacy.  The  "Teutonic  Peoples"  are  "the 
English  speaking  inhabitants  of  the  British  Isles,  the  Ger- 
man speaking  inhabitants  of  Germany,  Austria-Hungary 
and  Switzerland,  the  Flemish  speaking  inhabitants  of  Bel- 
gium, the  Scandinavian  inhabitants  of  Sweden  and  Nor- 
way and  practically  all  of  the  inhabitants  of  Holland  and 
Denmark."     ("Encyclopedia  Britannica.") 


THE  AMERICAN  EMPIRE  '    27 


This  Teutonic  domination  has  been  established  only  by 
the  bitterest  of  struggles.  During  the  time  when  North 
America  was  being  settled,  the  English  dispossessed  first 
the  Spanish  and  later  the  French.  Since  the  Battle  of 
Waterloo — won  by  English  and  German  troops;  and  the 
Crimean  War — won  by  British  against  Russian  troops — 
the  Teutonic  power  has  gone  unchallenged  and  so  it  re- 
mains to-day. 

The  dominant  power  in  the  United  States  for  nearly  two 
centuries  has  been  the  English  speaking  power.  Thus  the 
Americans  draw  their  inspiration,  not  only  from  the  Aryan, 
but  from  the  English  speaking  Teutons — the  most  aggres- 
sive and  dominating  group  among  the  Aryans. 

Three  hundred  years  ago  the  title  to  North  America  was 
claimed  by  Spain,  France  and  Great  Britain.  The  land 
itself  was  almost  entirely  in  the  hands  of  Indian  tribes  which 
held  the  possession  that  according  to  the  proverb,  is  ''nine 
points  of  the  law." 

The  period  of  American  settlement  has  witnessed  the 
rapid  dispossession  of  the  original  holders,  until,  at  the 
present  time,  the  Indians  have  less  than  two  per  cent  of 
the  land  area  of  the  United  States.^ 

The  conquest,  by  the  English  speaking  whites,  of  the  three 
million  square  miles  Avhich  comprise  the  United  States  haa 
been  accomplished  in  a  phenomenally  short  space  of  time. 
Migration ;  military  occupation ;  appropriation  of  the  lands 
taken  from  the  * '  enemy ; ' '  settlement,  and  permanent  exploi- 
tation— through  all  these  stages  of  conquest  the  country 
has  moved. 

The  "Historical  Register  of  the  United  States  Army" 
(F.  B.  Heitman,  Washington,  Govt.  Print.,  1903,  vol.  2,  pp. 
298-300)  contains  a  list  of  114  wars  in  which  the  United 
States  has  been  engaged  since  1775.  The  publication  like- 
wise presents  a  list  of  8600  battles  and  engagments  incident 

iThe  total  number  of  square  miles  in  Indian  Reservations  in  1918 
was  53,490  as  against  241,800  square  miles  in  1880.  (Statistical 
Abstract  of  the  United  States,  1918,  p.  8.) 


28  THE  AMERICAN  EMPIRE 

to  these  114  wars.  Two  of  these  wars  were  with  England, 
one  with  Mexico  and  one  with  Spain.  These,  together 
with  the  Civil  War  and  the  War  with  Germany,  consti- 
tute the  major  struggles  in  which  the  United  States  has  been 
engaged.  In  addition  to  these  six  great  wars  there  were  the 
numerous  wars  with  the  Indians,  the  last  of  which  (with  the 
Chippewa)  occurred  in  1898.  Some  of  these  Indian  "wars" 
were  mere  policing  expeditions.  Others,  like  the  wars  with 
the  Northwest  Indians,  with  the  Seminoles  and  with  the 
Apaches,  lasted  for  years  and  involved  a  considerable  out- 
lay of  life  and  money. 

Wlien  the  Indian  Wars  were  ended,  and  the  handful  of 
red  men  had  been  crushed  by  the  white  millions,  the  Amer- 
ican Indians,  once  possessors  of  a  hunting  ground  that 
stretched  across  the  continent,  found  themselves  in  reser- 
vations, under  government  tutelage,  or  else,  abandoning 
their  own  customs  and  habits  of  life,  they  accepted  the 
' '  pale-face ' '  standards  in  preference  to  their  own  well-loved 
traditions. 

The  territory  flanking  the  Mississippi  Valley,  with  its 
coastal  plains  and  the  deposits  of  mineral  wealth,  is  one 
of  the  richest  in  the  world.  Only  two  other  areas,  China 
and  Russia,  can  compare  with  it  in  resources. 

This  garden  spot  came  into  the  possession  of  the  English 
speaking  whites  almost  )vithout  a  struggle.  It  was  as  if 
destiny  had  held  a  door  tight  shut  for  centuries  and  sud- 
denly had  opened  it  to  admit  her  chosen  guests. 

History  shows  that  such  areas  have  almost  always  been 
held  by  one  powerful  nation  after  another,  and  have  been 
the  scene  of  ferocious  struggles.  Witness  the  valleys  of  the 
Euphrates,  the  Nile,  the  Danube,  the  Po  and  the  Rhine. 
The  barrier  of  the  Atlantic  saved  North  America. 

Had  the  Mississippi  Valley  been  in  Europe,  Asia  or 
Northern  Africa,  it  would  doubtless  have  been  blood-soaked 
for  centuries  and  dominated  by  highly  organized  nations, 
armed  to  the  teeth.  Lying  isolated,  it  presented  an  almost 
virgin  opportunity  to  the  conquering  Teutons  of  Western 
Europe. 


THE  AMERICAN  EMPIRE  29 


Freed  by  their  isolated  position  from  the  necessity  of 
contending  against  outside  aggression,  the  inhabitants  of  the 
United  States  have  expended  their  combative  energies 
against  the  weaker  peoples  with  whom  they  came  into  imme- 
diate contact, — 

1.  The  Indians,  from  whom  they  took  the  land  and 
wrested  the  right  to  exploit  the  resources  of  the  con- 
tinent ; 

2.  The  African  Negroes  who  were  captured  and  brought 
to  America  to  labor  as  slaves ; 

3.  The  Mexicans,  from  whom  they  took  additional  slave 
territory  at  a  time  when  the  institution  of  slavery  was 
in  grave  danger,  and 

4.  The  Spanish  Empire  from  which  they  took  foreign  in- 
vestment opportunities  at  a  time  when  the  business 
interests  of  the  country  first  felt  the  pressure  of  sur- 
plus wealth. 

Each  of  these  four  groups  was  weak.  No  one  of  them 
could  present  even  the  beginnings  of  an  effectual  resistance 
to  the  onslaught  of  the  conquerors.  Each  in  turn  was 
forced  to  bow  the  knee  before  overwhelming  odds. 


2.  The  First  Obstacle  to  Conquest 

The  first  obstacle  to  the  spread  of  English  civilization 
across  the  continent  of  North  America  was  the  American 
Indian.  He  was  in  possession  of  the  country ;  he  had  a  cul- 
ture of  his  own ;  he  held  the  white  man 's  civilization  in  con- 
tempt and  refused  to  accept  it.  He  had  but  one  desire, — to 
be  let  alone. 

The  continent  was  a  ''wilderness"  to  the  whites.  To 
the  Indians  it  was  a  home.  Their  villages  were  scattered 
from  the  Atlantic  to  the  Pacific,  from  the  Gulf  to  Alaska; 
tliey  knew  well  its  mountains,  plains  and  rivers.  A  primi- 
tive people,  supporting  themselves  largely  by  hunting, 
fishing,  simple  agriculture  and  such  elemental  manual  arts 


30  THE  AMERICAN  EMPIRE 

as  pottery  and  weaving,  tliey  found  the  vast  stretches  of 
North  America  none  too  large  to  provide  them  with  the 
means  of  satisfying  their  wants. 

The  ideas  of  the  Indian  differed  fundamentally  from 
those  of  the  white  man.  Holding  to  the  Eastern  conception 
which  makes  the  spiritual  life  paramount,  he  reduced  his 
material  existence  to  the  simplest  possible  terms.  He  had 
no  desire  for  possessions,  which  he  regarded — at  the  best — • 
as  "only  means  to  the  end  of  his  ultimate  perfection."- 
To  him,  the  white  man's  desire  for  wealth  was  incompre- 
hensible and  the  white  man's  sedentary  life  was  contempt- 
ible. He  must  be  free  at  all  times  to  commune  with 
nature  in  the  valleys,  and  at  sunrise  and  sunset  to  ascend 
the  mountain  peak  and  salute  the  Great  Spirit. 

The  individual  Indian — ^liaving  no  desire  for  M^ealth — ■ 
could  not  be  bribed  or  bought  for  gold  as  could  the  Euro- 
pean. The  leaders,  democratically  selected,  and  held  by  tlie 
most  enduring  ties  of  loyalty  to  their  tribal  oaths,  were 
above  the  mercenary  standards  of  European  commerce 
and  statesmanship.  Friendly,  hospitable,  courteous,  gen- 
erous, hostile,  bitter,  ferocious  they  were — but  they  were 
not  for  sale. 

The  attitude  of  the  Indian  toward  the  land  which  the 
white  men  coveted  was  typical  of  his  whole  relation  with 
white  civilization.  *  *  Land  ownership,  in  the  sense  in  which 
we  use  the  term,  was  unknown  to  the  Indians  till  the  whites 
came  among  them."^  The  land  devoted  to  villages  was 
tribal  property ;  the  hunting  ground  surrounding  the  vil- 
lage was  open  to  all  of  the  members  of  the  tribe ;  between 
the  hunting  grounds  of  different  tribes  there  was  a  neutral 
territory — no  man's  land — that  was  common  to  both.  If 
a  family  cultivated  a  patch  of  land,  the  neighbors  did 
not  trespass.  Among  the  Indians  of  the  Southwest  tlie 
village  owned  the  agricultural  land  and  "periodically  its 

2  "Tlie  Indian  of  To-day,"  C.  A.  Eastman.  New  York,  Doubleday, 
1915,  p.  4. 

3  "The  Indian  and  His  Problem,"  F,  D.  Leupp.  New  York,  Scrib- 
ners,  1910,  p.  23, 


THE  AMERICAN  EMPIRE  31 


governor,  elected  by  popular  vote,  would  distribute  or 
redistribute  the  arable  acres  among  his  constituents  who 
were  able  to  care  for  them. ' '  *  The  Indians  believed  that 
the  land,  like  the  sunlight,  was  a  gift  of  the  Great  Spirit 
to  his  children,  and  they  were  as  willing  to  part  with  the 
one  as  with  the  other. 

They  carried  their  communal  ideas  still  farther.  Among 
the  Indians  of  the  Northwest,  a  man's  possessions  went 
at  his  death  to  the  whole  tribe  and  were  distributed  among 
the  tribal  members.  Among  the  Alaskan  Indians,  no 
man,  during  his  life,  could  possess  more  than  he  needed 
while  his  neighbor  lacked.  Food  was  always  regarded  as 
common  property.  "The  rule  being  to  let  him  who  was 
hungry  eat,  wherever  he  found  that  which  would  stay  the 
cravings  of  his  stomach. ' '  ^  The  motto  of  the  Indian  was 
' '  To  each  according  to  his  need. ' ' 

Such  a  communist  attitude  toward  property,  coupled 
with  a  belief  that  the  land — ^the  gift  of  the  Great  Spirit 
— was  a  trust  committed  to  the  tribe,  proved  a  source  of 
constant  irritation  to  the  white  colonists  who  needed  addi- 
tional territory.  As  the  colonies  grew,  it  became  more  and 
more  imperative  to  increase  the  land  area  open  for  settle- 
ment, and  to  such  encroachments  the  Indian  offered  a  stub- 
bom  resistance. 

The  Indian  would  not — could  not — part  with  his  land, 
neither  would  he  work,  as  a  slave  or  a  wage-servant.  Be- 
fore such  degradation  he  preferred  death.  Other  peoples 
— the  negroes;  the  inhabitants  of  Mexico,  Peru  and  the 
"West  Indies;  the  Hindus  and  the  Chinese — ^made  slaves 
or  servants.  The  Indian  for  generations  held  out  stolidly 
against  the  efforts  of  missionaries,  farmers  and  manufac- 
turers alike  to  convert  him  into  a  worker. 

The  Indian  could  not  understand  the  ideas  of  "pur- 
chase," "sale"  and  "cash  payment"  that  constitute  essen- 
tial features  of  the  white  man's  economy.    To  him  strength 

4  Ibid.,  p.  24. 
6  Ibid.,  p.  10. 


32  THE  AMERICAN  EMPIRE 


of  limb,  courage,  endurance,  sobriety  and  personal  dignity 
and  reserve  were  infinitely  superior  to  any  of  the  com- 
mercial virtues  w^hich  the  white  men  possessed. 

This  attitude  of  the  Indian  toward  European  standards 
of  civilization;  his  indifference  to  material  possessions;  his 
unwillingness  to  part  with  the  land ;  and  his  refusal  to 
work,  made  it  impossible  to  * '  assimilate ' '  him,  as  other  peo- 
ples were  assimilated,  into  colonial  society.  The  individual 
Indian  would  not  demean  himself  by  becoming  a  cog  in  the 
white  man's  machine.  He  preferred  to  live  and  die  in 
the  open  air  of  his  native  hills  and  plains. 

The  Indian  was  an  intense  individualist — trained  in  a 
school  of  experience  where  initiative  and  personal  quali- 
ties were  the  tests  of  survival.  He  placed  the  soles  of  his 
moccasined  feet  firmly  against  his  native  earth,  cast  his 
eyes  around  him  and  above  him  and  melted  harmoniously 
into  his  native  landscape. 

Missionaries  and  teachers  labored  in  vain — once  an  In- 
dian, always  an  Indian.  The  white  settlers  pushed  on 
across  mountain  ranges  and  through  valleys.  Generations 
came  and  went  without  any  marked  progress  in  bringing 
the  white  men  and  the  red  men  together.  AVlien  the 
Indian,  in  the  mission  or  in  the  government  school  did 
become  "civilized,"  he  gave  over  his  old  life  altogether 
and  accepted  the  white  man's  codes  and  standards.  The 
two  methods  of  life  were  too  far  apart  to  make  amalga- 
mation possible. 

3.  Getting  the  Land 

The  white  man  must  have  land!  Population  was  grow- 
ing. The  territory  along  the  frontier  seemed  rich  and 
alluring. 

Everywhere,  the  Indian  was  in  possession,  and  every- 
M^here  he  considered  the  sale  of  land  in  the  light  of  part- 
ing with  a  birth-right.  He  was  friendly  at  first,  but  he 
Iiad  no  sympathy  with  the  standards  of  white  civilization. 


THE  AMERICAN  EMPIRE  33 


For  such  a  situation  there  was  only  one  possible  solution. 
Under  the  plea  that  ''necessity  knows  no  law"  the  white 
man  took  up  the  task  of  eliminating  the  Indian,  with  the 
least  friction,  and  in  the  most  effective  manner  possible. 

There  were  three  methods  of  getting  the  land  away  from 
the  Indian — the  easiest  was  by  means  of  treaties,  under 
which  certain  lands  lying  along  the  Atlantic  Coast  were 
turned  over  to  the  whites  in  exchange  for  larger  terri- 
tories west  of  the  Mississippi.  The  second  method  was  by 
purchase.  The  third  was  by  armed  conquest.  All  three 
methods  were  employed  at  some  stage  in  the  relations 
between  the  whites  and  each  Indian  tribe. 

The  experience  with  the  Cherokee  Nation  is  typical  of 
the  relation  between  the  whites  and  the  other  Indian  tribes. 
(Annual  Report  of  the  Bureau  of  Ethnology.  Vol.  5. 
"The  Cherokee  Nation,"  by  Charles  C.  Royce.) 

The  Cherokee  nation  before  the  year  1650  was  estab- 
lished on  the  Tennessee  River,  and  exercised  dominion 
over  all  the  country  on  the  east  side  of  the  Alleghany 
Mountains,  including  the  head-waters  of  the  Yadkin,  the 
Catawba,  the  Broad,  the  Savannah,  the  Chattahoochee  and 
the  Alabama.  In  1775  there  were  43  Cherokee  towns  cov- 
ering portions  of  this  territory.  In  1799  their  towns  num- 
bered 51. 

Treaty  relations  between  tlie  whites  and  the  Cherokees 
began  in  1721,  when  there  was  a  peace  council,  held  be- 
tween the  representatives  of  37  towns  and  the  authorities 
of  South  Carolina.  From  that  time,  until  the  treaty  made 
with  the  United  States  government  in  1866,  the  Cherokees 
were  gradually  pushed  back  from  their  rich  hunting 
grounds  toward  the  Mississippi  valley.  By  the  treaty  of 
1791,  the  United  States  solemnly  guaranteed  to  the  Chero- 
kees aU  of  their  land,  the  whites  not  being  permitted  even 
to  hunt  on  them.  In  1794  and  1804  new  treaties  were 
negotiated,  involving  additional  cessions  of  land.  By  the 
treaty  of  1804,  a  road  was  to  be  cut  through  the  Cherokee 
territory,  free  for  the  use  of  all  United  States  citizens. 


84  THE  AMERICAN  EMPIRE 


An  agitation  arose  for  the  removal  of  the  Cherokees  to 
some  point  west  of  the  Mississippi  River.  Some  of  the 
Indians  accepted  the  opportunity  and  went  to  Arkansas. 
Others  held  stubbornly  to  their  villages.  Meanwhile  white 
hunters  and  settlers  encroached  on  their  land;  white  men 
debauched  their  women,  and  white  desperadoes  stole  their 
stock.  By  the  treaty  of  1828  the  United  States  agreed  to 
possess  the  Cherokees  and  to  guarantee  to  them  forever 
several  millions  of  acres  west  of  Arkansas,  and  in  addi- 
tion a  perpetual  outlet  west,  and  a  "free  and  unmolested 
use  of  all  the  country  lying  west  of  the  western  boundary 
of  the  above  described  limits  and  as  far  west  as  the 
sovereignty  of  the  United  States  and  their  right  of  soil 
extend"  (p.  229).  The  Cherokees  who  had  settled  in 
Arkansas  agreed  to  leave  their  lands  within  14  months. 
By  the  treaty  of  1836  the  Cherokees  ceded  to  the  United 
States  all  lands  east  of  the  Mississippi.  There  was  con- 
siderable difficulty  in  enforcing  this  provision  but  by  de- 
grees most  of  the  Indians  were  removed  west  of  the  river. 
In  1859  and  1860  the  Commissioner  of  Indian  affairs  pre- 
pared a  survey  of  the  Cherokee  domain.  This  was  op- 
posed by  the  head  men  of  the  nation.  By  the  Treaty  of 
1866  other  tribes  were  quartered  on  land  owned  by  the 
Cherokees  and  railroads  were  run  through  their  territory. 

Diploniacy,  money  and  the  military  forces  had  done 
their  work.  The  first  treaty,  made  in  1721,  found  the 
Cherokee  nation  in  virtual  possession  of  the  mountainous 
regions  of  Southeastern  United  States.  The  twenty- 
fourth  treaty  (1866)  left  them  on  a  tiny  reservation,  two 
thousand  miles  from  their  former  home.  Those  twenty- 
four  treaties  had  netted  the  State  and  Federal  governments 
81,220,374  acres  of  land  (p.  378).  To-day  the  Cherokee 
Nation  has  63,211  acres." 


6  "Referring  to  your  inquiry  of  November  20,  1919,  concerning  the 
Cherokee  Indian  Reservation,  you  are  advised  that  tlie  Cherokee  In- 
dian country  in  the  northeastern  part  of  Oklalioma  aggregated  4,420,- 
068  acres. 

"Of  said  area  4,346,223  acres  have  been  allotted  in  severalty  to 
the  enrolled  members  of  said  Cherokee  Indian  Nation,   Oklahoma. 


THE  AMERICAN  EMPIRE  35 

A  great  nation  of  proud,  independent,  liberty-loving 
men  and  women,  came  into  conflict  with  the  whites  of  the 
Carolinas  and  Georgia ;  with  the  state  and  national  govern- 
ments. "For  two  hundred  years  a  contest  involving  their 
very  existence  as  a  people  has  been  maintained  against  the 
unscrupulous  rapacity  of  Anglo-Saxon  civilization.  By 
degrees  they  were  driven  from  their  ancestral  domain  to 
an  unknown  and  inhabitable  region"  (p.  371).  Now  the 
contest  is  ended.  The  white  men  have  the  land.  The 
Cherokees  have  a  little  patch  of  territory ;  government  sup- 
port; free  schools  and  the  right  to  accept  the  sovereignty 
of  the  nation  that  has  conquered  them. 

The  theory  upon  which  the  whites  proceeded  in  taking 
the  Indian  lands  is  thus  stated  by  Leupp, — "Originally, 
the  Indians  owned  all  the  land;  later  we  needed  most  of  it 
for  ourselves;  therefore,  it  is  but  just  that  the  Indians 
should  have  what  is  left. ' '  ^ 


4.  The  Triumph  of  the  Whites 

The  early  white  settlers  had  been,  in  almost  every  in- 
stance, hospitably  or  even  reverentially  welcomed  by  the 
Indians,  who  regarded  them  as  children  of  the  Great  White 
Spirit.  During  the  first  bitter  winters,  it  was  the  Indians 
who  fed  the  colonists  from  their  supplies  of  grain ;  guided 
them  to   the   better  lands,   and  shared  with  them  their 

Twenty-two  thousand  eight  hundred  and  eighty  acres  were  disposed 
of  as  town  lots,  or  reserved  for  railway  rights  of  way,  churches, 
schools,  cemeteries,  etc.,  and  the  remaining  area  has  been  sold,  or 
otherwise  disposed  of  as  provided  by  law. 

"The  Cherokee  tribal  land  in  Oklahoma  with  the  exception  of  the 
possible  title  of  said  Nation  to  certain  river  beds  has  been  disposed  of. 

"In  reference  to  the  Eastern  band  of  Cherokees,  you  are  advised 
that  said  Indians  who  have  been  incorporated  hold  title  in  fee  to 
certain  land  in  North  Carolina,  kno^^^l  as  the  Qualla  Reservation  and 
certain  other  lands,  aggregating  63,211  acres." — Letter  from  the 
Office  of  Indian  AfTairs.     Dec.  9,  1919,  "In  re  Cherokee  land." 

7  "The  Indian  and  His  Problem,"  F.  E.  Leupp.  New  York,  Scrib- 
ners,  1910,  p.  24. 


36  THE  AMERICAN  EMPIRE 


knowledge  of  hunting,  fishing  and  agriculture.  The  whites 
retaliated  with  that  cunning,  grasping,  bestial  ferocity 
which  has  spread  terror  through  the  earth  during  the  past 
five  centuries. 

In  the  early  years,  when  the  whites  were  few  and  the 
Indians  many,  the  whites  satisfied  themselves  by  debauch- 
ing the  red  men  with  whiskey  and  bribing  them  with 
baubles  and  trinkets.  At  the  same  time  they  made  offen- 
sive and  defensive  alliances  with  them.  The  Spanish  in 
the  South;  the  French  in  the  North  and  the  English  be- 
tween, leagued  themselves  with  the  various  tribes,  supplied 
them  with  gunpowder  and  turned  them  into  mercenaries 
who  fought  for  hire.  Heretofore  the  Indian  had  been  a 
free  man,  fighting  his  wars  and  feuds  as  free  men  have 
done  time  out  of  mind.  The  whites  hired  him  as  a  profes- 
sional soldier  and  by  putting  bounties  on  scalps,  plying  the 
Indians  with  whiskey  and  inciting  them  by  every  known 
device,  they  converted  them  into  demons. 

There  is  no  evidence  to  show  that  up  to  the  advent  of 
the  white  men  the  Indian  tribes  did  any  more  fighting 
among  themselves  than  the  nobles  of  Germany,  the  city 
states  of  Italy  or  the  other  inhabitants  of  western  Europe. 
Indeed  there  has  recently  been  published  a  complete  trans- 
lation of  the  *  *  Constitution  of  the  Five  Nations, ' '  a  league 
to  enforce  peace  which  the  Indians  organized  about  the 
year  1390,  A.  D.^  This  league  which  had  as  its  object  the 
establishment  of  the  "Great  Peace"  was  built  upon  very 
much  the  same  argument  as  that  advanced  for  the  League 
of  Nations  of  1919. 

When  the  whites  first  came  to  North  America,  the  In- 
dians were  a  formidable  foe.  For  years  they  continued  to 
be  a  menace  to  the  lonely  settler  or  the  frontier  village. 
But  when  the  white  settlers  were  once  firmly  established, 
the  days  of  uncertainty  were  over,  and  the  Indians  were 
brushed  aside  as  a  man  brushes  aside  a  troublesome 
insect.  Their  ** uprisings"  and  "wars"  counted  for  little 
or  notliing.     They  were  inferior  in  numbers;  they  were 

8  See  Bulletin  184,  New  York  State  Museiun,  Albany^  1916,  p.  61. 


THE  AMERICAN  EMPIRE  37 


poorly  armed  and  equipped;  they  had  no  reserves  upon 
which  to  draw ;  there  was  no  organization  among  the  tribes 
in  distant  portions  of  the  country.  The  white  millions 
swept  onward.  The  Indian  bands  made  a  stand  here  and 
there  but  the  tide  of  white  civilization  overwhelmed  them, 
smothered  them,  destroying  them  and  their  civilization 
together. 

The  Indians  were  the  first  ohstacle  to  the  building  of  the 
American  Empire.  Three  hundred  years  ago  the  whole 
three  million  square  miles  that  is  now  the  United  States 
was  theirs.  They  were  the  American  people.  To-day  they 
number  328,111  in  a  population  of  105,118,467  and  the 
total  area  of  their  reservations  is  53,489  square  miles. 
(Statistical  Abstract  of  the  U.  S.,  1918,  pp.  8  and  776.) 


38  THE  AMERICAN  EMPIRE 

IV.    SLAVERY  FOR  A  RACE 

1.  The  Labor  Shortage 

The  American  colonists  took  the  land  wliich  they  re- 
quired for  settlement  from  the  Indians.  The  labor  neces- 
sary to  work  this  land  was  not  so  easily  secured.  The 
colonists  had  set  themselves  the  task  of  establishing  Euro- 
pean civilization  upon  a  virgin  continent.  In  order  to 
achieve  this  result,  they  had  to  cut  the  forests;  clear  the 
land;  build  houses;  cultivate  the  soil;  construct  ships; 
smelt  iron,  and  carry  on  a  multitude  of  activities  that  wero 
incidental  to  setting  up  an  old  way  of  life  in  a  new  world. 
The  one  supreme  and  immediate  need  was  the  need  for 
labor  power.  From  the  earliest  days  of  colonization  there 
had  been  no  lack  of  harbors,  fertile  soil,  timber,  minerals 
and  other  resources.  From  the  earliest  days  the  colonists 
experienced  a  labor  shortage. 

The  labor  situation  was  trebly  difficult.  First,  there  was 
no  native  labor ;  second,  passage  from  Europe  was  so  long 
and  so  hazardous  that  only  the  bold  and  venturesome  were 
willing  to  attempt  it,  and  third,  when  these  adventurers 
did  reach  the  new  world,  they  had  a  choice  between  taking 
up  free  land  and  working  it  for  themselves  and  taking 
service  with  a  master.  Men  possessing  sufficient  initiative 
to  leave  an  old  home  and  make  a  journey  across  the  sea 
were  not  the  men  to  submit  themselves  to  unnecessary 
authority  when  they  might,  at  will,  become  masters  of  their 
own  fortunes.  The  appeal  of  a  new  life  was  its  own  argu- 
ment, and  the  newcomers  struck  out  for  themselves. 

Throughout  the  colonies,  and  particularly  in  the  South 
where  the  plantation  culture  of  rice  and  tobacco,  and  later 
of  cotton,  called  for  large  numbers  of  unskilled  workers, 
the  labor  problem  was  acute.  The  abundance  of  raw  ma- 
terials aud  fertile  land;  the  speedy  growth  of  industry  in 


THE  AMERICAN  EMPIRE  39 


the  North  and  of  agriculture  in  the  South;  the  generous 
profits  and  expanding  markets  created  a  labor  demand 
which  far  outstripped  the  meager  supply, — a  demand  that 
was  met  by  the  importation  of  black  slaves  from  Africa. 


2.  The  Slave  Coast 

The  ** Slave  Coast"  from  which  most  of  the  Negroes 
came  was  discovered  by  Portuguese  navigators,  who  were 
the  first  Europeans  to  venture  down  the  West  coast  of 
Africa,  and,  rounding  the  "lobe"  of  the  continent,  to  sail 
East  along  the  ''Gold  Coast."  The  trade  in  gold  and 
ivory  which  sprang  up  as  a  result  of  these  early  explora- 
tions led  other  nations  of  Europe  to  begin  an  eager  com- 
petition which  eventually  brought  French,  Dutch,  German, 
Danish  and  English  commercial  interests  into  sharp  con- 
flict with  the  Portuguese. 

Ships  sailing  from  the  Gold  Coast  for  home  ports  made 
a  practice  of  picking  up  such  slaves  as  they  could  easily 
secure.  By  1450  the  number  reaching  Portugal  each  year 
was  placed  at  600  or  700.^  From  this  small  and  quit© 
incidental  beginning  there  developed  a  trade  which  eventu- 
ally supplied  Europe,  the  "West  Indies,  North  America  and 
South  America  with  black  slaves. 

Along  the  "Slave  Coast,"  which  extended  from  Cape 
Verde  on  the  North  to  Cape  St,  Llartha  on  the  South,  and 
in  the  hinterland  there  lived  Negroes  of  varying  tempera- 
ments and  of  varying  standards  of  culture.  Some  of  them 
were  fierce  and  warlike.  Others  were  docile  and  amenable 
to  discipline.  The  former  made  indifferent  slaves;  the 
latter  were  eagerly  sought  after.  "The  Wyndahs,  Nagoes 
and  Pawpaws  of  the  Slave  Coast  were  generally  the  most 
highly  esteemed  of  all.  They  were  lusty  and  industrious, 
cheerful  and  submissive. ' '  - 


1  Historv  of  the  Gold  Coast,"  W.  W.  Claridge.     London,  Murray, 
1915,  vol.  I,  p.  39. 

2  "American  Negro  Slavery,"  U.  B.  Phillips.     New  York,  Appleton. 
1908,  p.  43. 


40  THE  AMERICAN  EMPIRE 


The  natives  of  the  Slave  Coast  had  made  some  notable 
cultural  advances.  They  smelted  metals;  made  pottery; 
wove;  manufactured  swords  and  spears  of  merit;  built 
houses  of  stone  and  of  mud,  and  made  ornaments  of  some 
artistic  value.  They  had  developed  trade  with  the  inte- 
rior, taking  salt  from  the  coast  and  bartering  it  for  gold, 
ivory  and  other  commodities  at  regular  "market  places." 

The  native  civilization  along  the  West  coast  of  Africa 
was  far  from  ideal,  but  it  was  a  civilization  which  had 
established  itself  and  which  had  made  progress  during  his- 
toric times.  It  was  a  civilization  that  had  evolved  lan- 
guage; arts  and  crafts;  tribal  unity;  village  life,  and  com- 
munal organization.  This  native  African  civilization,  in 
the  seventeenth,  eighteenth  and  early  nineteenth  centuries 
was  confronted  by  an  insatiable  demand  for  black  slaves. 
The  conflicts  that  resulted  from  the  efforts  to  supply  that 
demand  revolutionized  and  virtually  destroyed  all  that 
was  worthy  of  preservation  in  the  native  culture. 

"When  the  whites  first  went  to  the  Slave  Coast  there  was 
comparatively  little  slavery  among  the  natives.  Some  cap- 
tives, taken  in  war;  some  debtors,  unable  to  meet  their 
obligations,  and  some  violators  of  religious  rites,  were  held 
by  the  chief  or  the  headman  of  the  tribe.  On  occasion  he 
would  sell  these  slaves,  but  the  slave  trade  was  never  estab- 
lished as  a  business  until  the  white  man  organized  it. 

The  whites  came,  and  with  guile  and  by  force  they  per- 
suaded and  compelled  the  natives  to  permit  the  erection  of 
forts  and  of  trading  posts.  From  the  time  of  the  first 
Portuguese  settlement,  in  1482,  the  whites  began  their 
work  with  rum  and  finished  it  with  gun-powder.  Rum  de- 
stroyed the  stamina  of  the  native;  gun-powder  rendered 
his  intertribal  wars  more  destructive.  These  two  agencies 
of  European  civilization  combined,  the  one  to  degenerate, 
the  other  to  destroy  the  native  tribal  life. 

The  traders,  adventurers,  buccaneers  and  pirates  that 
gathered  along  the  Slave  Coast  were  not  able  to  teach  the 
natives  anything  in  ihe  way  of  cruelty,  but  they  could  and 


THE  AMERICAN  EMPIRE  41 


did  give  them,  lessons  in  cunning,  trickery  and  double  deal- 
ing. Early  in  the  history  of  the  Gold  Coast  the  whites 
began  using  the  natives  to  make  war  on  commercial  rivals. 
In  one  famous  instance,  "the  Dutch  had  instigated  the 
King  of  Fetu  to  refuse  the  Assins  permission  to  pass 
through  his  territory.  These  people  used  to  bring  a  great 
deal  of  gold  to  Cape  Coast  Castle  (English),  and  the 
Dutch  hoped  in  this  way  to  divert  the  trade  to  their  own 
settlements.  The  King  having  complied  and  plundered 
some  of  the  traders  on  the  way  down,  the  Assins  declared 
war  against  him  and  were  assisted  by  the  English  with  arms 
and  ammunition.  The  King  of  Sabol  was  also  paid  to  help 
them,  and  the  allied  army  (20,000  strong)  inflicted  a  crush- 
ing defeat  on  the  Fetus. ' '  * 

On  another  occasion,  the  Dutch  were  worsted  in  a  war 
with  some  of  the  native  tribes.  Realizing  that  if  they  were 
to  maintain  themselves  on  the  Coast  they  must  raise  an 
army  as  quickly  as  possible,  they  approached  the  Fetus 
and  bargained  with  them  to  take  the  field  and  fight  the 
Komendas  until  they  had  utterly  exterminated  them,  on 
payment  of  $4,500.  But  no  sooner  had  this  arrangement 
been  made  than  the  English  paid  the  Fetus  an  additional 
$4,500  to  remain  neutral !  * 

Before  1750,  when  the  competition  for  the  slaves  was 
less  keen,  and  the  supply  came  nearer  to  meeting  the  de- 
mand, the  slavers  were  probably  as  honest  in  this  as  they 
were  in  any  other  trade  with  the  natives.  The  whites  en- 
couraged and  incited  the  native  tribes  to  make  war  upon 
one  another  for  the  benefit  of  the  whites.  The  whites  fos- 
tered kidnaping,  slavery  and  the  slave  trade.  The  natives 
were  urged  to  betray  one  another,  and  the  whites  took  ad- 
vantage of  their  treachery.  During  the  four  hundred 
years  that  the  African  slave  trade  was  continued,  it  was 
the  whites  who  encouraged  it;  fostered  it;  and  backed  it 
financially.     The  slave  trade  was  a  white  man's  trade,  car- 

3  "A  History  of  the  Gold  Coast,"  W.  W.  Claridge.  London,  Mur- 
ray, 1915,  vol.  I,  p.  144. 

4  Ibid.,  p.  160. 


42  THE  AMERICAN  EMPIRE 


ried  on  under  conditions  as  far  removed  from  the  condi- 
tions of  ordinary  African  life  as  the  manufacturing  and 
trading  of  Europe  were  removed  from  the  manufacturing 
and  trading  of  the  Africans. 

3,  The  Slave  Trade 

"With  the  pressing  demand  from  the  Americas  for  a  gen- 
erous supply  of  black  slaves,  the  business  of  securing  them 
became  one  of  the  chief  commercial  activities  of  the  time. 
' '  The  trade  bulked  so  large  in  the  world 's  commerce  in  the 
seventeenth  and  eighteenth  centuries  that  every  important 
maritime  community  on  the  Atlantic  sought  a  share,  gen- 
erally with  the  sanction  and  often  with  the  active  assistance 
of  its  respective  sovereign. ' '  ^ 

The  catching,  holding  and  shipping  of  Negroes  on  the 
African  coast  was  the  means  by  which  the  demand  for 
slaves  was  met.  With  a  few  minor  exceptions,  the  whites 
did  not  engage  directly  in  slave  catching.  In  most  in- 
stances they  bought  their  slaves  from  native  brokers  who 
lived  in  the  coast  towns.  The  brokers,  in  turn,  received 
their  slaves  from  the  interior,  where  they  were  captured 
during  wars,  by  professional  raiding  parties,  well  supplied 
with  arms  and  ammunition.  Slave-catching,  begun  as  a 
kidnaping  of  individuals,  developed  into  a  large-scale  traf- 
fic that  provided  the  revenue  of  the  more  war-like  natives. 
Villages  were  attacked  and  burned,  and  whole  tribes  were 
destroyed  or  driven  off  to  the  slave-pens  on  the  coast. 
After  1750,  for  nearly  a  hundred  years,  the  demand  for 
slaves  was  so  great  and  the  profits  were  so  large  that  no 
pains  were  spared  to  secure  them. 

The  Slave  Coast  native  was  compelled  to  choose  between 
being  a  slave-catcher  or  a  slave.  As  a  slave-catcher  he 
spread  terror  and  destruction  among  his  fellows,  seized 
them  and  sold  them  to  white  men.  As  a  slave  he  made 
the  long  journey  across  the  Atlantic. 

5  "American  Negro  Slavery,"  U.  B.  Phillips.  New  York,  Appleton, 
1918,  p.  20. 


THE  AMERICAN  EMPIRE  43 


The  number  of  slaves  carried  away  from  Africa  is  vari- 
ously estimated,  Claridge  states  that  "the  Guinea  Coast 
as  a  whole  supplied  as  many  as  from  70,000  to  100,000 
yearly"  in  1700,*^  Bogart  estimates  the  number  of  slaves 
secured  as  2,500  per  year  in  1700;  15,000  to  20,000  per 
year  from  1713  to  1753 ;  in  1771,  47,000  carried  by  British 
ships  alone ;  and  in  1768  the  slaves  shipped  from  the  Afri- 
can coast  numbered  97,000/  Add  to  these  numbers  those 
who  were  killed  in  the  raids ;  those  who  died  in  the  camps, 
where  the  mortality  was  very  high,  and  those  who  com- 
mitted suicide.  The  total  represents  the  disturbing  influ- 
ence that  the  slave  trade  introduced  into  the  native  African 
civilization. 

In  the  early  years  of  the  trade  the  ships  were  small  and 
carried  only  a  few  hundred  Negroes  at  most.  As  the  trade 
grew,  larger  and  faster  ships  were  built  with  galleries  be- 
tween the  decks.  On  these  galleries  the  blacks  were  forced 
to  lie  with  their  feet  outboard — ironed  together,  two  and 
two,  with  the  chains  fastened  to  staples  in  the  deck.  * '  They 
were  squeezed  so  tightly  together  that  the  average  space 
allowed  to  each  one  was  but  16  inches  by  five  and  a  half 
feet."  ^  The  galleries  were  frequently  made  of  rough  lum- 
ber, not  tightly  joined.  Later,  when  the  trade  was  out- 
lawed, the  slaves  were  stowed  away  out  of  sight  on  loose 
shelves  over  the  cargo.  **Wliere  the  'tween  decks  space 
was  two  feet  high  or  more,  the  slaves  were  stowed  sitting 
up  in  rows,  one  crowded  into  the  lap  of  another,  and  with 
legs  on  legs,  like  rider  on  a  crowded  toboggan."  (Spears, 
p.  71.)  There  they  stayed  for  the  weeks  or  the  months  of 
the  voyage.  **In  storms  the  sailors  had  to  put  on  the 
hatches  and  seal  tight  the  openings  into  the  infernal  cess- 
pool." (Spears,  p.  71.)  The  odor  of  a  slaver  was  often 
unmistakable  at  a  distance  of  five  miles  down  wind. 

6  "History  of  the  Gold  Coast,"  W.  W.  Claridge.  London,  Murray, 
1915,  vol.  i;  p.  172. 

7  "Economic  History  of  the  U.  S.,"  E.  L.  Bogart.  New  York, 
Longmans,  1910  ed.,  p.  84-5. 

8"Tlie  American  Slave  Trade,"  J.  R.  Spears.  New  York,  Scrib- 
nerB,  1901,  p.  69. 


44  THE  AMERICAN  EMPIRE 


The  terrible  revolt  of  the  slaves  in  the  West  Indies,  be- 
ginning in  1781,  gave  the  growing  anti-slavery  sentiment 
an  immense  impetus.  It  also  gave  the  slave  owners  pause. 
The  cotton-gin  had  not  yet  been  invented.  Slavery  was  on 
a  shifty  economic  basis  in  the  South.  Great  Britain  passed 
the  first  law  to  limit  the  slave  trade  in  ^788;  the  United 
States  outlawed  the  trade  in  1794.  In  1824  Great  Britain 
declared  the  slave  trade  piracy.  During  these  years,  and 
during  the  years  that  followed,  until  the  last  slaver  left 
New  York  Harbor  in  1863,  the  trade  continued  under  the 
American  flag,  in  swift,  specially  constructed  American- 
built  ships. 

As  the  restrictions  upon  the  trade  became  more  severe  in 
the  face  of  an  increasing  demand  for  slaves,  "the  fitting 
out  of  slavers  developed  into  a  flourishing  business  in  the 
United  States,  and  centered  in  New  York  City."  The  New 
York  Journal  of  Commerce  notes  in  1857  that  * '  down-town 
merchants  of  wealth  and  respectability  are  extensively  en- 
gaged in  buying  and  selling  African  Negroes,  and  have 
been,  with  comparatively  little  interruption  for  an  indef- 
inite number  of  years."  A  writer  in  the  Continental 
Monthly  for  January,  1862,  says: — "The  city  of  New  York 
has  been  until  of  late  the  principal  port  of  the  world  for 
this  infamous  commerce ;  although  the  cities  of  Boston  and 
Portland  are  only  second  to  her  in  distinction."  During 
the  years  1859-1860  eighty-five  slavers  are  reported  to  have 
fitted  out  in  New  York  Harbor  and  these  ships  alone  had 
a  capacity  to  transport  from  30,000  to  60,000  slaves  a  year." 

The  merchants  of  the  North  pursued  the  slave  trade  so 
relentlessly  because  it  paid  such  enormous  profits  on  the 
capital  outlay.  Some  of  the  voyages  went  wrong,  but  the 
trade,  on  the  whole,  netted  immense  returns.  At  the  end 
of  the  eighteenth  century  a  good  ship,  fitted  to  carry  from 
300  to  400  slaves,  could  be  built  for  about  $35,000.  Such 
a  ship  would  make  a  clear  profit  of  from  $30,000  to  $100,000 
in  a  single  voyage.     Some  of  them  made  as  many  as  five 


0  "Tlie    Suppression    of   the    American    Slave    Trade,"    W.    E. 
DuBois.     New  York,  Longmans,  1896,  p.  178-9. 


THE  AMERICAN  EMPIRE  45 


voyages  before  they  became  so  foul  that  they  had  to  be 
abandoned.^*'  While  some  voyages  were  less  profitable  than 
others,  there  was  no  avenue  of  international  trade  that  of- 
fered more  alluring  possibilities. 

Sanctioned  by  potentates,  blessed  by  the  church,  and  sur- 
rounded with  the  garments  of  respectability,  the  slave  trade 
grew,  until,  in  the  words  of  Samuel  Hopkins  (1787),  ''The 
trade  in  human  species  has  been  the  first  wheel  of  com- 
merce in  Ne^vport,  on  which  every  other  movement  in  busi- 
ness has  depended.  .  .  .  By  it  the  inhabitants  have  gotten 
most  of  their  wealth  and  riches."  (Spears,  p.  20.)  After 
the  vigorous  measures  taken  by  the  British  Government  for 
its  suppression,  the  slave  trade  was  carried  on  chiefly  in 
American-built  ships;  officered  by  American  citizens; 
backed  by  American  capital,  and  under  the  American  flag. 

The  slave  trade  was  the  business  of  the  North  as  slavery 
was  the  business  of  the  South.  Both  flourished  until  the 
Proclamation  of  Emancipation  in  1863. 

4.  Slavery  in  the  United  States 

Slavery  and  the  slave  trade  date  from  the  earliest  colo- 
nial times.  The  first  slaves  in  the  English  colonies  were 
brought  to  Jamestown  in  1619  by  a  Dutch  ship.  The  first 
American-built  slave  ship  was  the  Desire,  launched  at 
Marblehead  in  1636.  There  were  Negro  slaves  in  New 
York  as  early  as  1626,  although  there  were  only  a  few  hun- 
dred slaves  in  the  colonies  prior  to  1650. 

Since  slave  labor  is  economical  only  where  the  slaves  can 
be  worked  together  in  gangs,  there  was  never  much  slavery 
among  the  farmers  and  small  business  men  of  the  North. 
On  the  other  hand,  in  the  South,  the  developing  plantation 
system  made  it  possible  for  the  owner  to  use  large  gangs 
of  slaves  in  the  clearing  of  new  land;  in  the  raising  of 

10  "The  American  Slave  Trade,"  J.  R.  Spears.  New  York,  Scrlb- 
ners,  1901,  p.  84-5. 


46  THE  AMERICAN  EMPIRE 


tobacco,  and  in  caring  for  rice  and  cotton.  The  plantation 
system  of  agi'iculture  and  the  cotton  gin  made  slavery  the 
success  that  it  was  in  the  United  States.  "The  charac- 
teristic American  slave,  indeed,  was  not  only  a  Negro,  but 
a  plantation  workman. ' '  ^^ 

The  opening  years  of  the  nineteenth  century  found  slav- 
ery intrenched  over  the  whole  territory  of  the  United  States 
that  lay  South  of  the  Mason  and  Dixon  line.  In  that  ter- 
ritory slave  trading  and  slave  owning  were  just  as  much 
a  matter  of  course  as  horse  trading  and  horse  owning  were 
a  matter  of  course  in  the  North.  "Every  public  auc- 
tioneer handled  slaves  along  with  other  properity,  and  in 
each  city  there  were  brokers,  buying  them  to  sell  again,  and 
handling  them  on  commission. "  ^^ 

The  position  of  the  broker  is  indicated  in  the  following 
typical  bill  of  sale  which  was  published  in  Charleston,  S.  C, 
in  1795.  ''Gold  Coast  Negroes.  On  Thursday,  the  17th 
of  March  instant,  will  be  exposed  to  public  sale  near  the 
exchange  .  .  .  the  remainder  of  the  cargo  of  negroes  im- 
ported in  the  ship  Success,  Captain  John  Conner,  con- 
sisting chiefly  of  likely  young  boys  and  girls  in  good  health, 
and  having  been  here  through  the  winter  may  be  considered 
in  some  degree  seasoned  to  the  climate. ' '  ^* 

Such  a  bill  of  sale  attracted  no  more  attention  at  that 
time  than  a  similar  bill  advertising  cattle  attracts  to-day. 

During  the  early  colonial  days,  the  slaves  were  better 
fed  and  provided  for  than  were  the  indentured  servants. 
They  were  of  greater  money  value  and,  particularly  in  the 
later  years  when  slavery  became  the  mainstay  of  Southern 
agriculture,  a  first  class  Negro,  acclimated,  healthy,  willing 
and  trustworthy,  was  no  mean  asset. 

Toward  the  end  of  the  eighteenth  century  slavery  began 
to  show  itself  unprofitable  in  the  South.     The  best  and  most 

11  "American  Negro  Slavery,"  U.  B.  Phillips.  New  York,  Apple- 
ton,  1918,  p.  VII. 

12  Ibid.,  p.  190. 

13  Ibid.,  p.  40. 


THE  AMERICAN  EMPIRE  47 

accessible  land  was  exhausted.  Except  for  the  rice  planta- 
tions of  South  Carolina  and  Georgia,  slavery  was  not 
paying.  The  Southern  delegates  to  tiie  Constitutional  Con- 
vention, with  the  exception  of  the  delegates  from  these 
states,  were  prepared  to  abolish  the  slave  trade.  Some  of 
them  were  ready  to  free  their  own  slaves.  Then  came  the 
invention  of  the  cotton  gin  and  the  rise  of  the  cotton  king- 
dom. The  amount  of  raw  cotton  consumed  by  England  was 
13,000  bales  in  1781 ;  572,000  bales  in  1820 ;  and  3,366,000 
bales  in  1860.  During  that  period,  the  South  was  almost 
the  sole  source  of  supply. 

The  attitude  of  the  South,  confronted  by  this  wave  of 
slave  prosperity,  underwent  a  complete  change.  Her 
statesmen  had  consented,  between  1808  and  1820,  to  severe 
restrictive  laws  directed  towards  the  slave  trade.  After 
cotton  became  king,  slaves  rose  rapidly  in  price ;  land,  once 
used  and  discarded,  was  again  brought  under  cultivation; 
cotton-planting  spread  rapidly  into  the  South  and  South- 
west; Texas  was  annexed;  the  Mexican  War  was  fought; 
an  agitation  was  begun  for  the  annexation  of  Cuba,  and 
Calhoun  (1836)  declared  that  he  "ever  should  regret  that 
this  term  (piracy)  had  been  applied"  to  the  slave  trade 
in  our  laws." 

The  change  of  sentiment  corresponded  with  the  changing 
value  of  the  slaves.  Phillips  publishes  a  detailed  table  of 
slave  values  in  which  he  estimates  that  an  unskilled,  able- 
bodied  young  slave  man  was  worth  $300  in  1795;  $500  to 
$700  in  1810 ;  $700  to  $1200  to  1840 ;  and  $1100  to  $1800 
in  1860.^^  The  factors  which  resulted  in  the  increased 
slave  prices  were  the  increased  demand  for  cotton,  the  in- 
creased demand  for  slaves,  and  the  decrease  in  the  importa- 
tion of  negroes  due  to  the  greater  severity  of  the  prohibi- 
tions on  the  slave  trade. 

1*  Benton,  "Abridgment  of  Debates."  .  XII,  p.  718. 
15  "American  Negro  Slavery,"  U.  B.  Phillips.     New  York,  Apple- 
ten,  1918,  p.  370. 


48  THE  AMERICAN  EMPIRE 


5.  Slavery  for  a  Bace 

The  American  colonists  needed  labor  to  develop  the 
wilderness.  "White  labor  was  scarce  and  high,  so  the  colo- 
nists turned  to  slave  labor  performed  by  imported  blacks. 
The  merchants  of  the  North  built  the  ships  and  carried  on 
the  slave  trade  at  an  immense  profit.  The  plantation  own- 
ers of  the  South  exploited  the  Negroes  after  they  reached 
the  states. 

The  continuance  of  the  slave  trade  and  the  provision  of  a 
satisfactory  supply  of  slaves  for  the  Southern  market  de- 
pended upon  slave-catching  in  Africa,  which,  in  turn,  in- 
volved the  destruction  of  an  entire  civilization.  This  work 
of  destruction  was  carried  forward  by  the  leading  com- 
mercial nations  of  the  world.  During  nearly  250  years  the 
English  speaking  inhabitants  of  America  took  an  active 
part  in  the  business  of  enslaving,  transporting  and  selling 
black  men.  These  Americans — citizens  of  the  United  States 
— bought  stolen  Negroes  on  the  African  coast;  carried  them 
against  their  will  across  the  ocean ;  sold  them  into  slavery, 
and  then,  on  the  plantations,  made  use  of  their  enforced 
labor. 

Both  slavery  and  the  slave  trade  were  based  on  a  purely 
economic  motive — the  desire  for  profit.  In  order  to  satisfy 
that  desire,  the  American  people  helped  to  depopulate  vil- 
lages,— to  devastate,  burn,  murder  and  enslave ;  to  wipe  out 
a  civilization,  and  to  bring  the  unwilling  objects  of  their 
gain-lust  thousands  of  miles  across  an  impassable  barrier 
to  alien  shores. 


THE  AMERICAN  EMPIRE  49 

V.    THE  WINNING  OF  THE  WEST 

1.  Westward,  Ho! 

The  English  colonists  in  America  occupied  only  the  nar- 
row strip  of  country  between  the  Alleghanies  and  the  At- 
lantic Ocean.  The  interior  was  inhabited  by  the  Indians, 
and  claimed  by  the  French,  the  Spanish  and  the  British, 
but  neither  possession  nor  legal  title  carried  weight  with 
the  stream  of  pioneers  that  was  making  a  path  into  the 
'  *  wilderness, ' '  crying  its  slogan, — '  *  Westward,  Ho  I "  as  it 
moved  toward  the  setting  sun.  The  first  objective  of  the 
pioneers  was  the  Ohio  Valley ;  the  second  was  the  valley  of 
the  Mississippi ;  the  third  was  the  Great  Plains ;  the  fourth 
was  the  Pacific  slope,  with  its  golden  sands.  Each  one  of 
these  objectives  developed  itself  out  of  the  previous  con- 
quest. 

The  settlers  who  made  their  way  across  the  mountains 
into  the  valley  of  the  Ohio,  found  themselves  in  a  land  of 
plenty.  The  game  was  abundant;  the  soil  was  excellent, 
and  soon  they  were  in  a  position  to  offer  their  surplus  prod- 
ucts for  sale.  These  products  could  not  be  successfully 
transported  across  the  mountains,  but  they  could  be  floated 
down  the  Ohio  and  the  Mississippi — a  natural  roadway  to 
the  sea.  But  beside  the  Indians,  who  claimed  all  of  the 
land  for  their  own,  there  were  the  Spaniards  at  New  Or- 
leans, doing  everything  in  their  power  to  prevent  the 
American  Colonists  from  building  up  a  successful  river 
commerce. 

The  frontiersmen  were  able  to  push  back  the  Indians. 
The  Spanish  garrisons  presented  a  more  serious  obstacle. 
New  Orleans  was  a  well  fortified  post  that  could  be  pro- 
visioned from  the  sea.  Behind  it,  therefore,  lay  the  whole 
power  of  the  Spanish  fleet.  The  right  of  navigation  waa 
finally  obtained  in  the  Treaty  of  1795.    Still  friction  con- 


50  THE  AMERICAN  EMPIRE 


tiuued  with  the  Spanish  authorities  and  serious  trouble 
was  averted  only  by  the  transfer  of  Louisiana,  first  to  the 
French  (1800)  and  then  by  them  to  the  United  States 
(1803).  Napoleon  had  agreed,  when  he  secured  this  terri- 
tory from  the  Spaniards,  not  to  turn  it  over  to  the  United 
States.  A  pressing  need  of  funds,  however,  led  him  to 
strike  an  easy  bargain  with  the  American  government 
which  was  negotiating  for  the  control  of  the  mouth  of  the 
Mississippi.  Napoleon  insisted  that  the  United  States  take, 
not  only  the  mouth  of  the  river,  but  also  the  territory  to 
the  West  which  he  saw  would  be  useless  without  this  outlet. 
After  some  hesitation,  Jefferson  and  his  advisers  accepted 
the  offer  and  the  Louisiana  Purchase  was  consummated. 

The  Louisiana  Purchase  gave  the  young  American  nation 
what  it  needed — a  place  in  the  sun.  The  colonists  had 
taken  land  for  their  early  requirements  from  the  Indians 
who  inhabited  the  coastal  plain.  They  had  enslaved  the 
Negroes  and  thus  had  secured  an  ample  supply  of  cheap 
labor.  Now,  the  pressure  of  population,  and  the  restless, 
pioneer  spirit  of  those  early  days,  led  out  into  the  West. 

Until  1830  immigration  was  not  a  large  factor  in  the 
increase  of  the  colonial  population,  but  the  birth-rate  was 
prodigious.  In  the  closing  years  of  the  eighteenth  century, 
Franklin  estimated  that  the  average  family  had  eight  chil- 
dren. There  were  sections  of  the  country  where  the  popu- 
lation doubled,  by  natural  increase,  once  in  23  years.  In- 
deed, the  entire  population  of  the  United  States  was  in- 
creasing at  a  phenomenal  rate.  The  census  of  1800  showed 
5,308,483  persons  in  the  countiy.  Twenty  years  later  the 
population  was  9,638,453 — an  increase  of  81  per  cent.  By 
1840  the  population  was  reported  as  17,069,453 — an  in- 
crease of  77  per  cent  over  1820,  and  of  221  per  cent  over 
1800. 

The  small  farmers  and  tradesmen  of  the  North  were 
settling  up  the  Northwest  Territory.  The  plantation  own- 
ers of  the  South,  operating  on  a  large  scale,  and  with  the 
wasteful  methods  that  inevitably  accompany  slavery,  were 
clamoring  for  new  land  to  replace  the  tracts  that  had  been 


THE  AMERICAN  EMPIRE  51 


exhausted  by  constant  reeropping  with  no  attempt  at  fertili- 
zation. 

Cotton  had  been  enthroned  in  the  South  since  the  inven- 
tion of  the  cotton  gin  in  1792.  With  the  resumption  of 
European  trade  relations  in  1815  the  demand  for  cotton 
and  for  cotton  lands  increased  enormously.  There  was 
one,  and  only  one  logical  way  to  meet  this  demand — through 
the  possession  of  the  Southwest. 


2.  The  Southwest 

The  pioneers  had  already  broken  into  the  Southwest  in 
large  numbers.  While  Spain  still  held  the  Mississippi, 
there  were  eager  groups  of  settlers  pressing  against  the 
frontier  which  the  Spanish  guarded  so  jealously  against 
all  comers.  The  Louisiana  Purchase  met  the  momentary 
demand,  but  beyond  the  Louisiana  Purchase,  and  between 
the  settlers  and  the  rich  lands  of  Texas  lay  the  Mexican 
boundary.  The  tide  of  migration  into  this  new  field  hurled 
itself  against  the  Mexican  border  in  the  same  way  that  an 
earlier  generation  had  roled  against  the  frontier  of 
Louisiana. 

The  attitude  of  these  early  settlers  is  described  with 
sympathetic  accuracy  by  Theodore  Roosevelt.  "Louisiana 
was  added  to  the  United  States  because  the  hardy  back- 
woods settlers  had  swarmed  into  the  valleys  of  the  Ten- 
nessee, the  Cumberland  and  the  Ohio  by  hundreds  of  thous- 
ands. .  .  .  Restless,  adventurous,  hardy,  they  looked  eagerly 
across  the  Mississippi  to  the  fertile  solitudes  where  the 
Spaniard  was  the  nominal,  and  the  Indian  the  real  master ; 
and  with  a  more  immediate  longing  they  fiercely  coveted 
the  Creole  provinces  at  the  moutli  of  the  river, ' '  ^  This 
fierce  coveting  could  have  only  one  possible  outcome — the 
colonists  got  what  they  wanted. 

i"The  Winning  of  the  West,"  Theodore  Roosevelt.  New  York, 
Putnam's,  1896,  vol.  4,  p.  262. 


52  THE  AMERICAN  EMPIRE 


The  speed  with  which  the  Southwest  rushed  into  promi- 
nence as  a  factor  in  national  affairs  is  indicated  by  its  con- 
tribution to  the  cotton-crop.  In  1811  the  states  and  ter- 
ritories from  Alabama  and  Tennessee  westward  produced 
one-sixteenth  of  the  cotton  grown  in  the  United  States.  In 
1820  they  produced  a  third;  in  1830,  a  half;  and  by  1860, 
three-quarters  of  the  cotton  raised.  At  the  same  time,  the 
population  of  the  Alabama-Mississippi   territory   was: — 

200,000  in  1810. 

445,000  in  1820. 

965,000  in  1830. 

1,377,000  in  1840. 

Thus  thirty  years  saw  an  increase  of  nearly  seven-fold 
in  the  population  of  this  region.^ 

Meanwhile,  slavery  had  become  the  issue  of  the  day.  The 
slave  power  was  in  control  of  the  Federal  Government,  and 
in  order  to  maintain  its  authority,  it  needed  new  slave  states 
to  offset  the  free  states  that  were  being  carved  out  of  the 
Northwest. 

Here  were  three  forces — ^first  the  desire  of  the  frontiers- 
men for  "elbow  room";  second  the  demand  of  King  Cotton 
for  unused  land  from  which  the  extravagant  plantation 
system  might  draw  virgin  fertility  and  third,  the  necessity 
that  was  pressing  the  South  to  add  territory  in  order  to  hold 
its  power.  All  three  forces  impelled  towards  the  South- 
west, and  it  was  thither  that  population  pressed  in  the 
years  following  1820, 

3.  Texas 

Mexico  lay  to  the  Southwest,  and  therefore  Mexico  became 
the  object  of  American  territorial  ambitions.  The  district 
now  known  as  Texas  had  constituted  a  part  of  the  Louisiana 
Purchase  (1803)  ;  had  been  ceded  to  Spain  (1819) ;  had 
been  made  the  object  of  negotiations  looking  towards  its 

2  "American  Negro  Slavery,*'  U,  B.  Phillips.  New  York,  Appleton, 
lt)18,  pp.  171-2. 


THE  AMERICAN  EMPIRE  53 


purchase  in  1826 ;  had  revolted  against  Mexico  and  been 

recognized  as  an  independent  state  in  1835. 

Texas  had  been  settled  by  Americans  who  had  secured  the 
permission  of  the  Mexican  Government  to  colonize.  These 
settlers  made  no  effort  to  conceal  their  opposition  to  the 
Mexican  Government,  with  which  they  were  entirely  out  of 
sympathy.  Many  of  them  were  seeking  territory  in  which 
slavery  might  be  perpetuated,  and  they  introduced  slaves 
into  Texas  in  direct  violation  of  the  Mexican  Constitution. 
The  Americans  did  not  go  to  Texas  with  any  idea  of  be- 
coming Mexican  subjects ;  on  the  contrary,  as  soon  as  they 
felt  themselves  strong  enough,  they  declared  their  inde- 
pendence of  Mexico,  and  began  negotiations  for  the  an- 
nexation of  Texas  to  the  United  States. 

The  Texan  struggle  for  independence  from  Mexico  was 
cordially  welcomed  in  all  parts  of  the  United  States,  but 
particularly  in  the  South.  Despite  the  protests  of  Mexico, 
public  meetings  were  held;  funds  were  raised;  volunteers 
were  enlisted  and  equipped,  and  supplies  and  munitions 
were  sent  for  the  assistance  of  the  Texans  in  ships  openly 
fitted  out  in  New  Orleans. 

No  sooner  had  the  Texans  established  a  government  than 
the  campaign  for  annexation  was  begun.  The  advocates 
of  annexation — principally  Southerners — argued  in  favor 
of  adding  so  rich  and  so  logical  a  prize  to  the  territory  of 
the  United  States,  citing  the  purchase  of  Louisiana  and  of 
Florida  as  precedents.  Their  opponents,  first  on  constitu- 
tional grounds  and  then  on  grounds  of  public  policy,  argued 
against  annexation. 

Opinion  in  the  South  was  greatly  aroused.  Despite  the 
fact  that  many  of  her  foremost  statesmen  were  against  an- 
nexation, some  of  the  Southern  newspapers  even  went  so  far 
as  to  threaten  the  dissolution  of  the  Union  if  the  treaty  of 
ratification  failed  to  pass  the  Senate. 

The  campaign  of  1844  was  fought  on  the  issue  of  an- 
nexation and  the  election  of  James  K.  Polk  was  a  pledge 
that  Texas  should  be  annexed  to  the  United  States.     During 


54  THE  AMERICAN  EMPIRE 

the  campaign,  the  line  of  division  on  annexation  had  been 
a  party  line — Democrats  favoring;  Whigs  opposing.  Be- 
tween the  election  and  the  passage  of  the  joint  resolution 
by  which  annexation  was  consummated,  it  became  a  sec- 
tional issue, — Southern  Whigs  favoring  annexation  and 
Northern  Democrats  opposing  it. 

So  strong  was  the  protest  against  annexation,  that  the 
treaty  could  not  command  the  necessary  two-thirds  vote  in 
the  Senate.  The  matter  was  disposed  of  by  the  passage 
of  a  joint  resolution  (March  1,  1845)  which  required  only 
a  majority  vote  in  both  houses  of  Congress.  President 
Polk  therefore  took  office  with  the  mandate  of  the  country 
and  the  decision  of  both  houses  of  the  retiring  Congress,  in 
favor  of  annexation. 

Mexico,  in  the  meantime,  had  offered  to  recognize  the 
independence  of  Texas  and  to  make  peace  with  her  if  the 
Texas  Congress  would  reject  the  joint  resolution,  and  refuse 
the  proffered  annexation.  This  the  Texas  Congress  re- 
fused, and  with  the  passage,  by  that  body,  of  an  act  pro- 
viding for  annexation,  the  Mexican  minister  was  with- 
drawn from  Washington,  and  Mexico  began  her  prepara- 
tions for  war. 

President  Polk  had  taken  office  with  the  avowed  intention 
of  buying'  California  from  Mexico.  The  rupture  threatened 
to  prevent  him  from  carrying  this  plan  into  effect.  He 
therefore  sent  an  unofficial  representative  to  Mexico  in  an 
effort  to  restore  friendly  relations.  Failing  in  that,  he  and 
his  advisers  determined  upon  war  as  the  only  feasible 
method  of  obtaining  California  and  of  settling  the  diplo- 
matic tangle  involved  in  the  annexation  of  Texas. 


4.  The  Conquest  of  Mexico 

The  Polk  Administration  made  the  Mexican  ^ar  as  a 
part  of  its  expansionist  policy. 

**Alt]:ough  that  unfortunate  country  (Mexico)  had  of- 
ficially notified  the  United  States  that  the  annexation  of 


THE  AMERICAN  EMPIRE  55 

Texas  would  be  treated  as  a  cause  of  war,  so  constant 
were  the  internal  quarrels  in  Mexico  that  open  hostilities 
would  have  been  avoided  had  the  conduct  of  the  Adminis- 
tration been  more  honorable.  That  was  the  opinion  of 
Webster,  Clay,  Calhoun,  Benton,  and  Tyler,  .  .  .  Mexico 
was  actually  goaded  on  to  war.  The  principle  of  the  mani- 
fest destiny  of  this  country  was  invoked  as  a  reason  for  the 
attempt  to  add  to  our  territory  at  the  expense  of  Mexico. ' '  ^ 

After  the  annexation  of  Texas  it  became  the  duty  of  the 
United  States  to  defend  that  state  against  the  threatened 
Mexican  invasion. 

Mexican  troops  had  occupied  the  southern  bank  of  the 
Rio  Grande.  General  Zachary  Taylor  with  a  small  force, 
moved  to  a  position  on  the  Nueces  River.  Between  the  two 
rivers  lay  a  strip  of  territory  the  possession  of  which  was 
one  of  the  sources  of  dispute  between  Mexico  and  Texas. 
What  followed  may  be  stated  in  the  words  of  one  of  the 
officers  who  participated  in  the  expedition :  *  *  The  presence 
of  the  United  States  troops  on  the  edge  of  the  territory 
farthest  from  the  Mexican  settlements  was  not  sufficient  to 
provoke  hostilities.  We  were  sent  to  provoke  a  fight,  but 
it  was  essential  that  Mexico  begin  it"  (p.  41).  ''Mexico 
showing  no  willingness  to  come  to  the  Nueces  to  drive  the  in- 
vaders from  her  soil,  it  became  necessary  for  the  *  invaders ' 
to  approach  to  within  a  convenient  distance  to  be  struck. 
Accordingly,  preparations  were  begun  for  moving  the  army 
to  the  Rio  Grande,  to  a  point  near  Matamoras.  It  was 
desirable  to  occupy  a  position  near  the  largest  center  of 
population  possible  to  reach  without  actually  invading 
territory  to  which  we  set  up  no  claim  whatever"  (p.  45).* 

The  occupation,  by  the  United  States  troops,  of  the  dis- 
puted territory  soon  led  to  a  clash  in  which  several  United 
States  soldiers  were  killed.  The  incident  was  taken  by 
the  President  as  a  sufficient  cause  for  the  declaration  of  a 

3  "History  of  the  United  States,"  James  F.  Rhoades.  New  York, 
Macmillan,  1906,  vol.  I,  p.  87. 

4  "Personal  Memoirs,"  U.  S.  Grant.  Mew  York,  Century,  1895, 
vol.  I. 


56  THE  AMERICAN  EMPIRE 


state  of  "war.  The  House  complied  readily  with  his  wishes, 
passing  the  necessary  resolution.  Several  members  of  the 
Senate  begged  for  a  delay  during  which  the  actual  state  of 
affairs  might  be  ascertained.  The  President  insisted,  how- 
ever, and  the  war  was  declared  (May  13, 1846). 

The  declaration  of  war  was  welcomed  with  wild  enthusi- 
asm in  the  South.  Meetings  were  called ;  funds  were  raised ; 
volunteers  were  enlisted,  equipped  and  despatched  in  all 
haste  to  the  scene  of  the  conflict. 

The  North  was  less  eager.  There  were  protests,  petitions, 
demonstrations.  Many  of  the  leaders  of  northern  opinion 
took  a  public  stand  against  the  war.  But  the  news  of  the 
first  victories  sent  the  country  mad  with  an  enthusia^n  in 
which  the  North  joined  the  South. 

The  United  States  troops,  during  the  Mexican  War,  won 
brilliant — almost  unbelievable  successes — against  superior 
forces  and  in  the  face  of  immense  natural  obstacles.  Had 
the  war  been  less  of  a  military  triumph  there  must  have 
been  a  far  more  widely-heard  protest  from  Polk's  enemies 
in  the  North.  Successful  beyond  the  wildest  dreams  of  its 
promoters,  the  victorious  war  carried  its  own  answer  to 
those  who  questioned  the  worthiness  of  the  cause.  Within 
two  years,  the  whole  of  Mexico  was  under  the  military  con- 
trol of  the  United  States,  and  that  country  was  in  a  posi- 
tion to  dictate  its  own  terms. 

The  demands  of  the  United  States  were  mild  to  the  ex- 
tent of  generosity.  Under  the  treaty  the  annexation  of 
Texas  was  validated;  New  Mexico  and  Upper  California 
were  ceded  to  the  United  States;  the  lower  Rio  Grande 
was  fixed  as  the  southern  boundary  of  Texas,  and  in  con- 
siderations of  these  additions  to  its  territory,  the  United 
States  agreed  to  pay  Mexico  fifteen  millions  of  dollars. 

Under  this  plan,  Mexico  was  paid  for  territory  that  she 
did  not  need  and  could  not  iLse,  while  the  United  States 
gave  a  money  consideration  for  the  title  to  land  that  was  al- 
ready hers  by  right  of  conquest,  and  of  which  she  was  in 
actual  possession. 


THE  AMERICAN  EMPIRE  57 


The  details  of  the  treaty  are  relatively  unimportant. 
The  outstanding  fact  is  that  Mexico  was  in  possession  of 
certain  territory  that  the  ruling  power  in  the  United  States 
wanted,  and  that  ruling  power  took  what  it  wanted  by 
force  of  arms.  "The  war  was  one  of  conquest  in  the  in- 
terest of  an  institution."  It  was  "one  of  the  most  unjust 
ever  waged  by  a  stronger  against  a  weaker  nation. ' '  ° 

Congressman  A.  P.  Gardner  of  Massachusetts  sum- 
marized the  matter  very  pithily  in  his  debate  with  Morris 
Hillquit  (New  York,  April  2,  1915),  "We  assisted  Texas 
to  get  away  from  Mexico  and  then  we  proceeded  to  annex 
Texas.  Plainly  and  bluntly  stated,  our  purpose  was  to 
get  some  territory  for  American  development."  (Steno- 
graphic report  in  the  New  York  Call,  April  11,  1915.) 


4.  Conquering  the  Conquered 

The  work  of  conquering  the  Southwest  was  not  completed 
by  the  termination  of  the  war.  Mexico  ceded  the  territory 
— in  the  neighborhood  of  a  million  square  miles — but  she 
was  giving  away  something  that  she  had  never  possessed. 
Mexico  claimed  title  to  land  that  was  occupied  by  the 
Indians.  She  had  never  conquered  it;  never  settled  it; 
never  developed  it.  Her  sovereignty  was  of  the  same 
shadowy  sort  that  Spain  had  exercised  over  the  country 
before  the  Mexican  revolution. 

The  new  owners  of  the  Southwest  had  a  very  different 
purpose  in  mind.  No  empty  title  would  satisfy  them. 
They  intended  to  use  the  land.  The  Indians — already  in 
possession — resented  the  encroachments  of  the  invaders, 
but  they  fared  no  better  than  the  Mexicans,  or  than  their 
red-skinned  brothers  who  had  contended  for  the  right  to 
fish  and  hunt  along  their  home  streams  in  the  Appalachians. 
The  Indians  of  the  Southwest  fought  stubbornly,  but  the 
wars  that  meant  life  and  death  to  them  were  the  merest 


5  "Pergonal  Memoirs,"  U.   S.   Grant.     New   York,   Century,    181)5, 
vol.  I,  pp.  115  and  32. 


58  THE  AMERICAN  EMPIRE 


pastime  for  an  army  that  had  just  completed  the  humilia- 
tion of  a  nation  of  the  size  and  strength  of  Mexico.  The 
Indians  were  swept  aside,  and  the  country  was  opened  to 
the  trapper,  the  prospector,  the  trader  and  the  settler. 

The  Mexican  War  was  a  slight  affair,  involving  a  rela- 
tively small  outlay  in  men  and  money.  The  total  number 
of  American  soldiers  killed  in  the  war  was  1,721;  the 
wounded  were  4,102 ;  the  deaths  from  accident  and  disease 
were  11,516,  making  total  casualties  of  5,823  and  total 
losses  of  15,618.*^ 

The  money  cost  of  the  Mexican  "War — the  army  and 
navy  appropriations  for  the  years  1846  to  1849  inclusive — 
was  $119,624,000.  Obviously  the  net  cost  of  the  war  was 
less  than  this  gross  total, — how  much  less  it  is  impossible 
to  say. 

No  satisfactory  figures  are  available  to  show  the  cost  in 
men  and  money  of  the  Indian  Wars  in  the  Southwest. 
"From  1849  to  1865,  the  government  expended  $30,000,000 
in  the  subjugation  of  the  Indians  in  the  territories  of  New 
Mexico  and  Arizona. ' ' '  Their  character  may  be  gauged  by 
noting  from  the  ** Historical  Register"  (A^ol.  2,  p.  281-2)  the 
losses  sustained  in  the  four  Indian  Wars  of  which  a  record 
is  preserved.  In  the  Northwest  Indian  Wars  (1790  to  1795) 
896  persons  were  killed  and  436  were  wounded;  in  the 
Seminole  War  (1817  to  1818)  46  were  killed  and  36  were 
wounded;  in  the  Black  Hawk  War  (1831-2)  the  killed  were 
26  and  the  wounded  39;  in  the  Seminole  War  (1835-1842) 
383  were  killed  and  557  wounded.  These  were  among  the 
most  serious  of  the  Indian  Wars  and  in  all  of  them  the  cost 
in  life  and  limb  was  small.  Judged  on  this  standard,  the 
losses  in  the  Southwest,  during  the  Indian  Wars,  were,  at 
most,  trifling.  The  total  outlay  that  was  involved  in  the 
conquest  of  the  vast  domain  would  not  have  covered  one 
first  class  battle  of  the  Great  War,  and  yet  this  outlay  added 

8  "Historical  Register  of  the  United  States  Army,"  F.  B.  Heitman. 
Washington,  Govt.  Print.,  vol.  2,  p.  282. 

7  "The  Story  of  New  Mexico,"  Horatio  0.  Ladd.  Boston,  D.  Loth- 
rop  Co.,  1891,  p.  333. 


THE  AMERICAN  EMPIRE  69 


to  the  territory  of  the  United  States  something  like  a 
million  square  miles  containing  some  of  tlie  richest  and  most 
productive  portions  of  the  earth 's  surface. 

This  domain  was  won  by  a  process  of  military  conquest ; 
it  was  taken  from  the  Mexicans  and  the  Indians  by  force  of 
arms.  In  order  to  acquire  it,  it  was  necessary  to  drive 
whole  tribes  from  their  villages ;  to  burn ;  to  main ;  to  kill. 
"St.  Louis,  New  Orleans,  St.  Augustine,  San  Antonio, 
Santa  Fe  and  San  Francisco  are  cities  that  were  built  by 
Frenchmen  and  Spaniards ;  we  did  not  found  them  but  we 
conquered  them."  "The  Southwest  was  conquered  only 
after  years  of  hard  fighting  with  the  original  owners" 
(p.  26).  "The  winning  of  the  West  and  the  Southwest 
is  a  stage  in  the  conquest  of  a  continent"  (p.  27).  "This 
great  westward  movement  of  armed  settlers  was  essentially 
one  of  conquest,  no  less  than  of  colonization"  (p.  370).* 
None  of  the  possessors  of  this  territory  were  properly  armed 
or  equipped  for  effective  warfare.  All  of  them  fell  an 
easy  prey  to  the  organized  might  of  the  Government  of  the 
United  States. 


8  "The  Winning  of  the  West,"  Tlieodore  Roosevelt.     Vol.  I,  p.  26, 
27,  and  Vol.  II,  p.  370. 


60  JTHE  AMERICAN  EMPIRE 

VI.    THE  BEGINNINGS  OF  "WORLD  DOMINION 

1.  The  Shifting  of  Control 

During  the  half  century  that  intervened  between  the 
War  of  1812  and  the  Civil  War  of  1861  the  policy  of  the 
United  States  government  was  decided  largely  by  men 
who  came  from  south  of  the  Mason  and  Dixon  line.  The 
Southern  whites, — class-conscious  rulers  with  an  institution 
(slavery)  to  defend, — acted  like  any  other  ruling'  class 
under  similar  circumstances.  They  favored  Southward 
expansion  which  meant  more  territory  in  which  slavery 
might  be  established. 

The  Southerners  were  looking  for  a  place  in  the  sun 
where  slavery,  as  an  institution,  might  flourish  for  the 
profit  and  power  of  the  slave-holding  class.  Their  most  ef- 
fective move  in  this  direction  was  the  annexation  of  Texas 
and  the  acquisition  of  territory  following  the  Mexican  War. 
An  insistent  drive  for  the  annexation  of  Cuba  was  cut  short 
by  the  Civil  War. 

Southern  sentiment  had  supported  the  Louisiana  Pur- 
chase of  1803  and  the  Florida  Purchase  of  1819.  From 
Jefferson's  time  Southern  statesmen  had  been  advocating 
the  purchase  of  Cuba.  Filibustering  expeditions  were 
fitted  out  in  Southern  ports  with  Cuba  as  an  objective; 
agitation  was  carried  on,  inside  and  outside  of  Congress; 
between  1850  and  1861  the  acquisition  of  Cuba  was  the 
question  of  the  day.  It  was  an  issue  in  the  Campaign  of 
1853.  In  1854  the  American  ministers  to  London,  France 
and  Madrid  met  at  the  direction  of  the  State  Department 
and  drew  up  a  document  (the  "Ostend  Manifesto")  deal- 
ing with  the  future  of  Cuba.  McMaster  summarizes  the 
Manifesto  in  these  words:  "The  United  States  ought  to 
buy  Cuba  because  of  its  nearness  to  our  coast ;  because  it 
belonged  naturally  to  that  great  group  of  states  of  which 


THE  AMERICAN  EMPIRE  61 


the  Union  was  the  providential  nursery;  because  it  com- 
manded the  mouth  of  the  Mississippi  whose  immense  and 
annually  growing  trade  must  seek  that  way  to  the  ocean, 
and  because  the  Union  could  never  enjoy  repose,  could 
never  be  secure,  till  Cuba  was  within  its  boundaries." 
(Vol.  viii,  pp.  185-6.)  If  Spain  refused  to  sell  Cuba  it  was 
suggested  that  the  United  States  should  take  it. 

The  Ostend  Manifesto  was  rejected  by  the  State  De- 
partment, but  it  was  a  good  picture  of  the  imperialistic 
sentiment  at  that  time  abroacf  among  certain  elements  in 
the  United  States. 

The  Cuban  issue  featured  in  the  Lincoln-Douglas  De- 
bates in  1858.  It  was  hotly  discussed  by  Congress  in  1859. 
Only  twenty  years  had  passed  since  the  United  States,  by 
force  of  arms,  had  taken  from  Mexico  territory  that  she 
coveted.  Now  it  was  proposed  to  appropriate  territory  be- 
longing to  Spain. 

The  outbreak  of  hostilities  deferred  the  project,  and  when 
the  Civil  War  was  over,  the  slave  power  was  shattered. 
From  that  time  forward  national  policy  was  guided  by  the 
leaders  of  the  new  industrial  North. 

The  process  of  this  change  was  fearfully  wasteful.  The 
shifting  of  power  from  the  old  regime  to  the  new  cost 
more  lives  and  a  greater  expenditure  of  wealth  than  all  of 
the  wars  of  conquest  that  had  been  fought  during  the  pre- 
ceding half  century. 

The  change  was  complete.  The  slaves  were  liberated  by 
Presidential  Proclamation.  The  Southern  form  of  civiliza- 
tion— patriarchal  and  feudal — disappeared,  and  upon  its 
ruins — rapidly  in  the  "West;  slowly  in  the  South — there 
arose  the  new  structure  of  an  industrial  civilization. 

The  new  civilization  had  no  need  to  look  outward  for 
economic  advantage.  Forest  tracts,  mineral  deposits  and 
feicile  land  aiforded  ample  opportunity  at  home.  It  was 
three  thousand  miles  to  the  Pacific  and  at  the  end  of  the 
journey  there  was  gold!  The  new  civilization  therefore 
turned  its  energies  to  the  problem  of  subduing  the  con- 


62  THE  AMERICAN  EMPIRE 


tinent  and  of  establishing  the  machinery  necessary  to  pro- 
vide for  its  vastly  increasing  needs.  A  small  part  of  the 
capital  required  for  this  purpose  came  from  abroad.  Most 
of  it  was  supplied  at  home.  But  the  events  involved  in 
opening  up  the  territory  west  of  the  Rockies,  of  spanning 
the  country  with  steel,  and  providing  outlets  for  the  prod- 
ucts of  the  developing  industries  were  so  momentous  that 
even  the  most  ambitious  might  fulfill  his  dreams  of  con- 
quest without  setting  foot  on  foreign  soil.  Territorial  ag- 
grandizement was  forgotten,  and  men  turned  with  a  will  to 
the  organization  of  the  East  and  the  exploration  and  devel- 
opment of  the  West. 

The  leaders  of  the  new  order  found  time  to  take  over 
Alaska  (1868)  with  its  590,884  square  miles.  The  move 
was  diplomatic  rather  than  economic,  however,  and  it  was 
many  years  before  the  huge  wealth  of  Alaska  was  even 
suspected. 

2.  Hawmi 

The  new  capitalist  interests  began  to  feel  the  need  of 
additional  territory  toward  the  end  of  the  nineteenth  cen- 
tury. The  desirable  resources  of  the  United  States  were 
largely  in  private  hands  and  most  of  the  available  free 
land  had  been  pre-empted.  Beside  that,  there  were  certain 
interests,  like  sugar  and  tobacco,  that  were  looking  with 
longing  eyes  toward  the  tempting  soil  and  climate  of  Ha- 
waii, Porto  Rico  and  Cuba. 

When  the  South  had  advocated  the  annexation  of  Texas, 
its  statesmen  had  been  denounced  as  expansionists  and 
imperialists.  The  same  fate  awaited  the  statesmen  of  the 
new  order  who  were  favoring  the  extension  of  United 
States  territory  to  include  some  of  the  contiguous  islands 
that  offered  special  opportunities  for  certain  powerful  fi- 
nancial interests. 

The  struggle  began  over  the  annexation  of  Hawaii. 
After  numerous  attempts  to  annex  Hawaii  to  the  United 
States  a  revolution  was  finally  consummated  in  Honolulu 


THE  AMERICAN  EMPIRE  63 


in  1893.  At  that  time,  under  treaty  provisions,  the  neu- 
trality of  Hawaii  was  guaranteed  by  the  United  States. 
Like-wdse,  *'of  the  capital  invested  in  the  islands,  two-thirds 
is  owned  by  Americans."  This  statement  is  made  in  ** Ad- 
dress by  the  Hawaiian  Branches  of  the  Sons  of  the  Ameri- 
can Revolution,  the  Sons  of  Veterans,  and  the  Grand  Army 
of  the  Republic  to  their  compatriots  in  America  Concern- 
ing the  Annexation  of  Hawaii."  (1807.)  These  advo- 
cates of  annexation  state  in  the  same  address  that :  * '  The 
revolution  (of  1893)  was  not  the  work  of  filibusterers  and 
adventurers,  but  of  the  most  conservative  and  law-abiding 
citizens,  of  the  principal  tax-payers,  the  leaders  of  indus- 
trial enterprises,  etc."  The  purpose  behind  the  revolution 
seemed  clear.  Certain  business  men  who  had  sugar  and 
other  products  to  sell  in  the  United  States,  believed  that 
they  would  gain,  financially,  by  annexation.  They  engi- 
neered the  revolution  of  1893  and  they  were  actively  en- 
gaged in  the  agitation  for  annexation  that  lasted  until  the 
treaty  of  annexation  was  confirmed  by  the  United  States 
in  1898.  The  matter  was  debated  at  length  on  the  floor  of 
the  United  States  Senate,  and  an  investigation  revealed  the 
essential  facts  of  the  case. 

The  immediate  cause  of  the  revolution  in  1893  was  fric- 
tion over  the  Hawaiian  Constitution.  After  some  agita- 
tion, a  "Committee  of  Safety"  was  organized  for  the  pro- 
tection of  life  and  property  on  the  islands.  Certain  mem- 
bers of  the  Hawaiian  government  were  in  favor  of  declar- 
ing martial  law,  and  dealing  summarilj^  with  the  conspira- 
tors. The  Queen  seems  to  have  hesitated  at  such  a  course 
because  of  the  probable  complications  with  the  government 
of  the  United  States. 

The  V.  8.  S.  Boston,  sent  at  the  request  of  United  Status 
Minister  Stevens  to  protect  American  life  and  property  in 
the  Islands,  was  lying  in  the  harbor  of  Honolulu.  After 
some  negotiations  between  the  "Committee  of  Safety"  and 
Minister  Stevens,  the  latter  requested  the  Commander  of 
the  Boston  to  land  a  number  of  marines.  This  was  dono 
on  the  afternoon  of  January  16,  1893.     Immediately  the 


64  THE  AMERICAN  EMPIRE 


Governor  of  the  Island  of  Oaliu  and  the  Minister  of  For- 
eign Affairs  addressed  official  communications  to  the  United 
States  ]\Iinister,  protesting  against  the  landing  of  troops 
** without  permission  from  the  proper  authorities."  Min- 
ister Stevens  replied,  assuming  full  responsibility. 

On  the  day  following  the  landing  of  the  marines,  the 
Committee  of  Safety,  under  the  chairmanship  of  Judge 
Dole,  who  had  resigned  as  Justice  of  the  Supreme  Coui-t 
of  Hawaii  in  order  to  accept  the  Chairmanship  of  the 
Committee,  proceeded  to  the  government  building,  and 
there,  under  cover  of  the  guns  of  the  United  States  Ma- 
rines, who  were  drawn  up  for  the  purpose  of  protecting  the 
Committee  against  possible  attack,  a  proclamation  was  read, 
declaring  the  abrogation  of  the  Hawaiian  monarchy,  and 
the  establishment  of  a  provisional  government  "to  exist 
until  terms  of  union  with  the  United  States  have  been  ne- 
gotiated and  agreed  upon."  Within  an  hour  after  the 
reading  of  this  proclamation,  and  while  the  Queen  and  her 
government  were  still  in  authority,  and  in  possession  of  the 
Palace,  the  Barracks,  and  the  Police  Station,  the  United 
States  Minister  gave  the  Provisional  Government  his  rec- 
ognition. 

The  Queen,  who  had  500  soldiers  in  the  Barracks,  was  in- 
clined to  fight,  but  on  the  advice  of  her  counselors,  she 
yielded  "to  the  superior  force  of  the  United  States  of 
America"  until  the  facts  could  be  presented  at  Washington, 
and  the  wrong  righted. 

Two  weeks  later,  on  the  first  of  February,  Minister  Ste- 
vens issued  a  proclamation  declaring  a  protectorate  over 
the  islands.  This  action  was  later  repudiated  by  the  au- 
thorities at  Washington,  but  on  February  15,  President 
Harrison  submitted  a  treaty  of  annexation  to  the  Senate. 
The  treaty  failed  of  passage,  and  President  Cleveland,  as 
one  of  his  first  official  acts,  ordered  a  complete  investigation 
of  the  whole  affair. 

The  Senate  Committee  on  Foreign  Relations  submitted  a 
report  on  the  matter  February  26,  1894.     Four  members 


THE  AMERICAN  EMPIRE  65 


referred  to  the  acts  of  Minister  Stevens  as  * '  active,  officious 
and  unbecoming'  participation  in  the  events  which  led  to 
the  revolution."  All  members  of  the  committee  agreed 
that  his  action  in  declaring  a  protectorate  over  the  Islands 
was  unjustified. 

The  same  kind  of  a  fight  that  developed  over  the  annexa- 
tion of  Texas  now  took  place  over  the  annexation  of  Ha- 
waii. A  group  of  senators,  of  whom  Senator  R.  F.  Petti- 
grew  was  the  most  conspicuous  figure,  succeeded  in  pre- 
venting the  ratification  of  the  annexation  treaty  until  July 
7,  1898.  Then,  ten  weeks  after  the  declaration  of  the  Span- 
ish-American War,  under  the  stress  of  the  war-hysteria, 
Hawaii  was  annexed  by  a  joint  resolution  of  Congress. 

The  Annexation  of  Hawaii  marks  a  turning  point  in 
the  history  of  the  United  States.  For  the  first  time,  the 
American  people  secured  possession  of  territory  lying  out- 
side of  the  mainland  of  North  America.  For  the  first  time 
the  United  States  acquired  territory  lying  within  the 
tropics.  The  annexation  of  Hawaii  was  the  first  im- 
perialistic act  after  the  annexation  of  Texas,  more  than 
fifty  years  before.  It  was  the  first  imperialistic  act  since 
the  capitalists  of  the  North  had  succeeded  the  slave-owners 
of  the  South  as  the  masters  of  American  public  life. 


3.  The  Spanish-American  War 

The  real  test  of  the  imperial  intentions  of  the  United 
States  came  with  the  Spanish- American  War.  An  old, 
shattered  world  empire  (Spain)  held  Porto  Rico,  Cuba  and 
the  Philippines.  Porto  Rico  and  Cuba  were  of  peculiar 
value  to  the  sugar  and  tobacco  interests  of  the  United 
States.  They  were  close  to  the  mainland,  they  were  enor- 
mously productive  and,  furthermore,  Cuba  contained  im- 
portant deposits  of  iron  ore. 

Spain  had  only  a  feeble  grip  on  her  possessions.  For 
years  the  natives  of  Cuba  and  of  the  Philippines  had  been 


66  THE  AMERICAN  EMPIRE 

in  revolt  against  the  Spanish,  power.     At  times  the  revolt 
was  covert.    Again  it  blazed  in  the  open. 

The  situation  in  Cuba  was  rendered  particularly  critical 
because  of  the  methods  used  by  the  Spanish  authorities  in 
dealing  "with  the  rebellious  natives.  The  Spaniards  were 
simply  doing  what  any  empire  does  to  suppress  rebellion 
and  enforce  obedience,  but  the  brutalities  of  imperialism, 
as  practiced  in  Cuba  by  the  Spaniards,  gave  the  Ameri- 
can interventionists  their  opportunity.  Day  after  day  the 
newspapers  carried  front  page  stories  of  Spanish  atrocities 
in  Cuba.  Day  after  day  the  ground  was  prepared  for 
open  intervention  in  the  interests  of  the  oppressed  Cubans. 
There  was  more  than  grim  humor  in  the  instructions  which 
a  great  newspaper  publisher  is  reported  to  have  sent  his 
cartoonist  in  Cuba, — ^"You  provide  the  pictures;  we'll 
furnish  the  war." 

The  conflict  was  precipitated  by  the  blowing  up  of  the 
United  States  battleship  Maine  as  she  lay  in  the  harbor  of 
Havana  (February  15,  1898).  It  has  not  been  settled  to 
this  day  whether  the  Blaine  was  blown  up  from  without  or 
■within.  At  the  time  it  was  assumed  that  the  ship  was 
blown  up  by  the  Spanish,  although  **  there  was  no  evi- 
dence whatever  that  any  one  connected  with  the  exercise 
of  Spanish  authority  in  Cuba  had  had  so  much  as  guilty 
knowledge  of  the  plans  made  to  destroy  the  Maine"  (p. 
270),  and  although  "toward  the  last  it  had  begun  to  look 
as  if  the  Spanish  Government  were  ready,  rather  than  let 
the  war  feeling  in  the  United  States  put  things  beyond  all 
possibility  of  a  peaceful  solution,  to  make  very  substan- 
tial concessions  to  the  Cuban  insurgents  and  bring  the 
troubles  of  the  Island  to  an  end"  (p.  273-4).^ 

Congress,  in  a  joint  resolution  passed  April  20,  1898,  de- 
clared that  "the  people  of  the  Island  of  Cuba  are,  and  of 
right  ought  to  be,  free  and  independent,  .  .  .  The  United 
States  hereby  disclaims  any  intention  to  exercise  sover- 
eignty, jurisdiction  or  control  over  said  island  except  for 

i"A  History  of  the  American  People,"  Woodrow  Wilson.  New 
York,  Harpers,  1902,  Vol.  V,  pp.  273-4. 


THE  AMERICAN  EMPIRE  67 


the  pacification  thereof,  and  asserts  its  determination,  when 
that  is  accomplished,  to  leave  the  government  and  control 
of  the  island  to  its  people. ' ' 

The  war  itself  was  of  no  great  moment.  There  was 
little  fighting  on  land,  and  the  naval  battles  resulted  in 
overwhelming  victories  for  the  American  Navy.  The 
treaty,  ratified  February  6,  1899,  provided  that  Spain 
should  cede  to  the  United  States  Guam,  Porto  Rico,  Cuba 
and  the  Philippines,  and  that  the  United  States  should  pay 
to  Spain  twenty  millions  of  dollars.  As  in  the  case  of 
the  Mexican  War,  the  United  States  took  possession  of 
the  territory  and  then  paid  a  bonus  for  a  clear  title. 

The  losses  in  the  war  were  very  small.  The  total  num- 
ber of  men  who  were  killed  in  action  and  who  died  of 
wounds  was  289;  while  3,949  died  of  accidents  and  dis- 
ease. ("Historical  Register,"  Vol.  2,  p.  187.)  The  cost 
of  the  war  was  comparatively  slight.  Hostilities  la.sted 
from  April  21,  1898  to  August  12,  1898.  The  entire  mili- 
tary and  naval  expense  for  the  year  1898  was  $443,368,000 ; 
for  the  year  1899,  $605,071,000.  Again  the  need  for  a 
larger  place  in  the  sun  had  been  felt  by  the  people  of  the 
United  States  and  again  the  United  States  had  won  im- 
mense riches  with  a  tiny  outlay  in  men  and  money. 

Now  came  the  real  issue, — ^What  should  the  United 
States  do  with  the  booty  ? 

There  were  many  who  held  that  the  United  States  was 
bound  to  set  the  peoples  of  the  conquered  territory  free. 
To  be  sure  the  specific  pledge  contained  in  the  joint  resolu- 
tion of  April  20,  1898,  applied  to  Cuba  alone,  but,  it  was 
argued,  since  the  people  of  the  Philippines  had  also  been 
fighting  for  liberty,  and  since  they  had  come  so  near  to 
winning  their  independence  from  the  Spaniards,  they  were 
likewise  entitled  to  it. 

On  the  other  hand,  the  advocates  of  annexation  insisted 
that  it  was  the  duty  of  the  United  States  to  accept  the  re- 
sponsibilities (the  "white  man's  burden")  that  the  acquisi- 
tion of  these  islands  involved. 


68  THE  AMERICAN  EMPIRE 


As  President  MeKinley  put  it: — "The  Philippines,  like 
Cuba  and  Porto  Rico,  were  entrusted  to  our  hands  by  the 
providence  of  God."  (President  MeKinley,  Boston,  Feb- 
ruary 16,  1899.)  How  was  the  country  to  avoid  such  a 
duty? 

Thus  was  the  issue  drawn  between  the  "imperialists" 
and  the  "anti-imperialists." 

The  imperialists  had  the  machinery  of  g'overnment,  the 
newspapers,  and  the  prestige  of  a  victorious  and  very  pop- 
ular war  behind  them.  The  anti-imperialists  had  half  a 
century  of  unbroken  tradition ;  the  accepted  principles  of 
self-government;  the  sayings  of  men  who  had  organized 
the  Revolution  of  1776;  written  the  Declaration  of  Inde- 
pendence; held  exalted  offices  and  piloted  the  nation 
through  the  Civil  War. 

The  imperialists  used  their  inside  position.  The  anti- 
imperialists  appealed  to  public  opinion.  They  organized  a 
league  "to  aid  in  holding  the  United  States  true  to  the 
principles  of  the  Declaration  of  Independence.  It  seeks 
the  preservation  of  the  rights  of  the  people  as  guaranteed 
to  them  by  the  Constitution.  Its  members  hold  self-gov- 
ernment to  be  fundamental,  and  good  government  to  be  but 
incidental.  It  is  its  purpose  to  oppose  by  all  proper  means 
the  extension  of  the  sovereignty  of  the  United  States  over 
subject  peoples.  It  will  contribute  to  the  defeat  of  any 
candidate  or  party  that  stands  for  the  forcible  subjugation 
of  any  people."  (From  the  declaration  of  principle 
printed  on  the  literature  in  1899  and  1900.)  Anti-im- 
perialist conferences  were  held  in  New  York,  Philadelphia, 
Chicago,  Indianapolis,  Boston  and  other  large  cities.  The 
League  claimed  to  have  half  a  million  members.  An  ex- 
tensive pamphlet  literature  was  published,  and  every  effort 
was  made  to  arouse  the  people  of  the  country  to  the  im- 
portance of  the  decision  that  lay  before  them. 

The  imperialists  said  a  great  deal  less  than  their  op- 
ponents, but  they  were  more  effective  in  their  efforts.  Tlie 
President  had  said,  in  his  message  to  Congress   (April  1, 


THE  AMERICAN  EMPIRE  69 


1898),  "I  speak  not  of  forcible  annexation,  for  that  can- 
not be  thought  of.  That,  by  our  code  of  morals,  would  be 
criminal  aggression."  The  phrase  was  seized  eagerly  by 
those  who  were  opposing  the  annexation  of  the  Spanish 
possessions.  After  the  war  with  Spain  had  begun,  the 
President  changed  front  on  the  ground  that  destiny  had 
placed  a  responsibility  upon  the  American  people  that 
they  could  not  shirk.  Taking  this  view  of  the  situation, 
the  President  had  only  one  course  open  to  him — to  insist 
upon  the  annexation  of  the  Philippines,  Porto  Rico  and 
Guam.  This  was  the  course  that  was  followed,  and  on 
April  11,  1899,  these  territories  were  officially  incorporated 
into  the  United  States. 

Senator  Hoar,  in  a  speech  on  January  9,  1899,  put  the 
issue  squarely.  He  described  it  as  "a  greater  danger  than 
we  have  encountered  since  the  Pilgrims  landed  at  Ply- 
mouth— the  danger  that  we  are  to  be  transformed  from  a 
republic,  founded  on  the  Declaration  of  Independence, 
guided  by  the  counsels  of  Washington,  into  a  vulgar,  com- 
monplace empire,  founded  upon  physical  force." 

Cuba  remained  to  be  disposed  of.  With  the  specific 
guarantee  of  independence  contained  in  the  joint  resolution 
passed  at  the  outbreak  of  the  war,  it  seemed  impossible  to 
do  otherwise  than  to  give  the  Cubans  self-government. 
Many  influential  men  lamented  the  necessity,  but  it  was 
generally  conceded.  But  how  much  independence  should 
Cuba  have?  That  question  was  answered  by  the  passage 
of  the  Cuban  Treaty  with  the  ''Piatt  Amendment"  at- 
tached. Under  the  treaty  as  ratified  the  United  States 
does  exercise  "sovereignty,  jurisdiction  and  control"  over 
the  island. 

4.  The  Philippines 

The  territory  acquired  from  Spain  was  now,  in  theory, 
disposed  of.  Practically,  the  Philippines  remained  as  a 
source  of  difficulty  and  even  of  political  danger. 

The  people  of  Cuba  were,  apparently,  satisfied.  The 
Porto  Ricans  had  accepted  the   authority  of  the  United 


70  THE  AMERICAN  EMPIRE 


States  without  question.  But  the  Filipinos  were  not  con- 
tent. If  the  Cubans  were  to  have  self-government,  why 
not  they? 

The  situation  was  complicated  by  the  peculiar  relations 
existing  between  the  Filipinos  and  the  United  States  Gov- 
ernment. Immediately  after  the  declaration  of  war  with 
Spain  the  United  States  Consul-Generai  at  Singapore  had 
cabled  to  Admiral  Dewey  at  Hong  Kong  that  Aguinaldo, 
leader  of  the  insurgent  forces  in  the  Philippines,  was  then 
at  Singapore,  and  was  ready  to  go  to  Hong  Kong.  Com- 
modore Dewey  cabled  back  asking  Aguinaldo  to  come  at 
once  to  Hong  Kong.  Aguinaldo  left  Singapore  on  April 
26,  1898,  and,  with  seventeen  other  revolutionary  Filiijino 
chiefs,  was  taken  from  Hong  Kong  to  Manila  in  the  United 
States  naval  vessel  McCulloch.  Upon  his  arrival  in  Manila, 
he  at  once  took  charge  of  the  insurgents. 

For  three  hundred  years  the  inhabitants  of  the  Philip- 
pines had  been  engaged  in  almost  incessant  warfare  with 
the  Spanish  autlK)rities.  In  the  spring  of  1898  they  were 
in  a  fair  way  to  win  their  independence.  They  had  a  large 
number  of  men  under  arms — from  20,000  to  30,000;  they 
had  fought  the  Spanish  garrisons  to  a  stand-still,  and  were 
in  practical  control  of  the  situation. 

Aguinaldo  was  furnished  with  4,000  or  5,000  stands  of 
arms  by  the  American  officials,  he  took  additional  arms 
from  the  Spaniards  and  he  and  his  people  cooperated  ac- 
tively with  the  Americans  in  driving  the  Spanish  out  of 
Luzon.  The  Filipino  army  captured  Iloilo,  the  second 
largest  city  in  the  Philippines,  without  the  assistance  of 
the  Americans.  On  the  day  of  the  surrender  of  Manila, 
151/^  miles  of  the  surrounding  line  was  occupied  by  the 
Filipinos  and  600  yards  by  the  American  troops.  Through- 
out the  early  summer,  the  relations  between  the  Filipinos 
and  the  Americans  continued  to  be  friendly.  General  An- 
derson, in  command  of  the  American  Army,  wrote  a  letter 
to  the  commander  of  the  Filipinos  (July  4,  1898)  in  which 
he  said, — "I  desire  to  have  the  most  amicable  relations 
with  you  and  to  have  you  and  your  people  cooperate  with 


THE  AMERICAN  EMPIRE  71 


us  in  military  operations  against  the  Spamsk  forces." 
During  the  summer  the  American  officers  called  upon  the 
Filipinos  for  supplies  and  information  and  accepted  their 
cooperation.  Aguinaldo,  on  his  part,  treated  the  Ameri- 
cans as  deliverers,  and  in  his  proclamations  referred  to 
them  as  "liberators"  and  "redeemers." 

The  Filipinos,  at  the  earliest  possible  moment,  organ- 
ized a  government.  On  June  18  a  republic  was  pro- 
claimed; on  the  23rd  the  cabinet  was  announced;  on  the 
27th  a  decree  was  published  providing  for  elections,  and 
on  August  6th  an  address  was  issued  to  foreign  govern- 
ments, announcing  that  the  revolutionary  government  was 
in  operation,  and  was  in  control  of  fifteen  provinces. 

The  real  intent  of  the  Americans  was  foreshadowed  in 
the  instructions  handed  by  President  McKinley  to  General 
Wesley  Merritt  on  May  19,  1898.  General  Merritt  was 
directed  to  inform  the  Filipinos  that  * '  we  come  not  to  make 
v;ar  upon  the  people  of  the  Philippines,  nor  upon  any  party 
or  faction  among  them,  but  to  protect  them  in  their  homes, 
in  their  employments,  and  in  their  personal  and  religious 
rights.  Any  persons  who,  either  by  active  aid  or  by  hon- 
est submission,  cooperate  with  the  United  States  in  its 
effort  to  give  effect  to  this  beneficent  purpose,  will  receive 
the  reward  of  its  support  and  protection. ' ' 

The  Filipinos  sent  a  delegation  to  Paris  to  lay  their 
claims  for  independence  before  the  Peace  Commission. 
Meeting  with  no  success,  they  visited  Washington,  with  no 
different  result.     They  were  not  to  be  free ! 

On  September  8,  1898,  General  Otis,  commander  of  the 
American  forces  in  the  Philippines,  notified  Aguinaldo  that 
unless  he  withdrew  his  forces  from  Manila  and  its  suburbs 
by  the  15th  "I  shall  be  obliged  to  resort  to  forcible  ac- 
tion." On  January  5,  1899,  by  Presidential  Proclamation, 
McKinley  ordered  that  "The  Military  Government  hereto- 
fore maintained  by  the  United  States  in  the  city,  harbor, 
and  bay  of  Manila  is  to  be  extended  with  all  possible  dis- 
patch to  the  whole  of  the  ceded  territory."     On  February 


72  THE  AMERICAN  EMPIRE 


4,  1899,  General  Otis  reported  "Firing  upon  the  Filipinos 
and  the  killing  of  one  of  them  by  the  Americans,  leading 
to  return  fire."  (Report  up  to  April  6,  1899.)  Then  fol- 
lowed the  Philippine  War  during  which  1,037  Americans 
were  killed  in  action  or  died  of  wounds;  2,818  were 
wounded,  and  2,748  died  of  disease.  ("Historical  Regis- 
ter," V/ol.  II,  p.  293.) 

The  Philippines  were  conquered  twice — once  in  a  contest 
with  Spain  (in  cooperation  with  the  Filipinos,  who  re- 
garded tliemselvcs  as  our  allies),  and  once  in  a  contest 
with  the  Filipinos,  the  native  inhabitants,  who  were  made 
subjects  of  the  American  Empire  by  this  conquest.^ 


5.  Impermlism  Accepted 

The  Philippine  War  was  the  last  political  episode  in  the 
life  of  the  American  Republic.  From  February  4,  1899, 
the  United  States  accepted  the  political  status  of  an  Em- 
pire. Hawaii  had  been  annexed  at  the  behest  of  the  Ha- 
waiian Government;  Porto  Rico  had  been  occupied  as  a 
part  of  the  war  strategy  and  without  any  protest  from  the 
Porto  Ricans.  The  Philippines  were  taken  against  the  de- 
termined opposition  of  the  natives,  who  continued  the 
struggle  for  independence  during  three  bitter  years. 

The  Filipinos  were  fighting  for  independence — fighting 
to  drive  invaders  from  their  soil.  The  United  States  au- 
thorities had  no  status  in  the  Philippines  other  than  that 
of  military  conquerors. 

Continental  North  America  was  occupied  by  the  whites 
after  a  long  struggle  with  the  Indian  tribes.  This  territory 
was  * '  conquered ' ' — but  it  was  contiguous — it  formed  a  part 
of  a  geographic  unity.  The  Philippines  were  separated 
from  San  Francisco  by  8,000  miles  of  water;  geographically 
they  were  a  part  of  Asia.     They  were  tropical  in  char- 

2  For  further  details  on  the  Philippine  problem  see  Senate  Docu- 
ment 62,  Part  I,  55tli  Congress,  Third  Session. 


THE  AMERICAN  EMPIRE  73 


acter,  and  were  inhabited  by  tribes  having  nothing  in  com- 
mon with  the  American  people  except  their  common  hu- 
manity. Nevertheless,  despite  non-contiguity;  despite  dis- 
tance; despite  dissimilarity  in  languages  and  customs,  the 
soldiers  of  the  United  States  conquered  the  Filipinos  and 
the  United  States  Government  took  control  of  the  islands, 
acting  in  the  same  way  that  any  other  empire,  under  like 
circumstances,  unquestionably  would  have  acted. 

There  was  no  strategic  reason  that  demanded  the  Philip- 
pines unless  the  United  States  desired  to  have  an  operating 
base  near  to  the  vast  resources  and  the  developing  markets 
of  China.  As  a  vantage  point  from  which  to  wage  com- 
mercial and  military  aggression  in  the  Far  East,  the  Philip- 
pines may  possess  certain  advantages.  There  is  no  other 
excuse  for  their  conquest  and  retention  by  the  United 
States  save  the  economic  excuse  of  advantages  to  be  gained 
from  the  possession  of  the  islands  themselves. 

The  end  of  the  nineteenth  century  saw  the  end  of  the 
Republic  about  which  men  like  Jefferson  and  Lincoln  wrote 
and  dreamed.  The  New  Century  marked  the  opening  of 
a  new  epoch — the  beginning  of  world  dominion  for  the 
United  States. 


74  THE  AMERICAN  EMPIRE 


VII.    THE  STRUGGLE  FOR  WEALTH  AND  POWER 

1.  Economic  Foundations 

The  people  of  the  United  States,  through  their  contests 
with  the  American  Indians,  the  Mexicans  and  the  Fili- 
pinos, have  established  that  "supreme  and  extensive  politi- 
cal domination"  which  is  one  of  the  chief  characteristics 
of  empire. 

But  the  American  Empire  does  not  rest  upon  a  political 
basis.  Only  the  most  superficial  portions  of  its  super- 
structure are  political  in  character.  Imperialism  in  the 
United  States,  as  in  every  other  modern  country,  is  built 
not  upon  politics,  but  upon  industry. 

The  struggle  between  empires  has  shifted,  in  recent  years, 
from  the  political  and  the  miilitary  to  the  economic  field. 
The  old  imperialism  was  based  on  military  conquest  and 
political  domination.  The  new  "financial"  imperialism  is 
based  on  economic  opportunities  and  advantages.  Under 
this  new  regime,  territorial  domination  is  subordinated  to 
business  profit. 

While  American  public  officials  were  engaged  in  the  rou- 
tine task  of  extending  the  political  boundaries  of  the  United 
States,  the  foundations  of  imperial  strength  were  being 
laid  by  the  masters  of  industrial  life — the  traders,  manu- 
facturers, bankers,  the  organizers  of  trusts  and  of  industrial 
combinations.  These  owners  and  directors  of  the  nation's 
wealth  have  been  the  real  builders  of  the  American  Empire. 

As  the  United  States  has  developed,  the  economic  motives 
have  come  more  and  more  to  the  surface,  imtil  no  modem 
nation — not  England  herself — has  such  a  record  in  the 
search  for  material  possessions.  The  pursuit  of  wealth,  in 
the  United  States,  has  been  carried  forward  ruthlessly; 
brutally.     "Anything  to  -win"  has  been  the  motto.     Man 


THE  AMERICAN  EMPIRE  75 

against  man,  and  group  against  group,  they  have  struggled 
for  gain, — ^first,  in  order  to  ' '  get  ahead ; ' '  then  to  accumu- 
late the  comforts  and  luxuries,  and  last  of  all,  to  possess  the 
immense  power  that  goes  with  the  control  of  modern  wealth. 

The  early  history  of  the  country  presaged  anything  but 
this.  The  colonists  were  seeking  to  escape  tyranny,  to 
establish  justice  and  to  inaugurate  liberty.  Their  promises 
were  prophetic.  Their  early  deeds  put  the  world  in  their 
debt.  Forward  looking  people  everywhere  thrilled  at  the 
mention  of  the  name  "America. ' '  Then  came  the  discovery 
of  the  fabulous  wealth  of  the  new  country ;  the  pressure  of 
the  growing  stream  of  immigrants;  the  heaping  up  of 
riches;  the  rapacious  search  after  more!  more!  the  deser- 
tion of  the  dearest  principles  of  America's  early  promise, 
and  the  transcribing  of  another  story  of  "economic  deter- 
minism." 

Until  very  recent  times  the  American  people  continued 
to  talk  of  political  affairs  as  though  they  were  the  matters 
of  chief  public  concern.  The  recent  growth  and  concen- 
tration of  economic  power  have  showed  plainly,  however, 
that  America  was  destined  to  play  her  greatest  role  on  the 
economic  field.  Capable  men  therefore  ceased  to  go  into 
politics  and  instead  turned  their  energies  into  the  whirl 
of  business,  where  they  received  a  training  that  made  them 
capable  of  handling  affairs  of  the  greatest  intricacy  and 
magnitude. 

2.  Every  Man  for  Himself 

The  development  of  American  industry,  during  the  hun- 
dred years  that  began  with  the  War  of  1812,  led  inevitably 
to  the  unification  of  business  control  in  the  hands  of  a 
small  group  of  wealth  owners. 

"Every  man  for  himself"  was  the  principle  that  the 
theorists  of  the  eighteenth  century  bequeathed  to  the  indus- 
trial pioneers  of  the  nineteenth.  The  philosophy  of  in- 
dividualism fitted  well  with  the  temperament  and  experi- 
ence of  the  English  speaking  peoples;  the  practice  of  in- 


76  THE  AMERICAN  EMPIRE 

dividualism  under  the  formula  ''Every  man  for  himself" 
seemed  a  divine  ordination  for  the  benefit  of  the  new  in- 
dustry. 

The  eager  American  population  adopted  the  slogan  with 
enthusiasm.  "Every  man  for  himself"  was  the  essence 
of  their  frontier  lives ;  it  was  the  breath  of  the  wilderness. 

But  the  idea  failed  in  practice.  Despite  the  assurances 
of  its  champions  that  individualism  was  necessary  to  pre- 
serve initiative  and  that  progress  was  impossible  without 
it,  like  many  another  principle — fine  sounding  in  theory, 
it  broke  down  in  the  application. 

The  first  struggle  that  confronted  the  ambitious  con- 
queror of  the  new  world  was  the  struggle  with  nature.  Her 
stores  were  abundant,  but  they  must  be  prepared  for  human 
use.  Timber  must  be  sawed;  soil  tilled;  fish  caught;  coal 
mined;  iron  smelted;  gold  extracted.  Rivers  must  be 
bridged ;  mountains  spanned ;  lines  of  communication  main- 
tained. The  continent  was  a  vast  storehouse  of  riches — 
potential  riches.  Before  they  could  be  made  of  actual  use, 
however,  the  hand  of  man  must  transform  them  and  trans- 
port them. 

These  necessary  industrial  proeessess  were  impossible 
under  the  "every  man  for  himself"  formula.  Here  was  a 
vast  continent,  with  boundless  opportunities  for  supplying 
the  necessaries  and  comforts  of  life — provided  men  were 
willing  to  come  together;  divide  up  the  work;  specialize; 
and  exchange  products. 

Cooperation — alone — could  conquer  nature.  The  basis 
of  this  cooperation  proved  to  be  the  machine.  Its  means 
was  the  system  of  production  and  transportation  built  upon 
the  use  of  steam,  electricity,  gas,  and  labor  saving  appli- 
ances. 

When  the  United  States  was  discovered,  the  shuttle  was 
thrown  by  hand ;  the  hammer  was  wielded  by  human  arm ; 
the  mill-stones  were  turned  by  wind  and  water;  the  boxes 
and  bales  were  carried  by  pack-animals  or  in  sailing  vessels, 
— these  proeessess  of  production  and  transportation  were 


THE  AMERICAN  EMPIRE  77 


conducted  in  practically  the  same  way  as  in  the  time  of 
Pharaoh  or  of  Alexander  the  Great.  A  series  of  discov- 
eries and  inventions,  made  in  England  between  1735  and 
1784,  substituted  the  machine  for  the  tool;  the  power  of 
steam  for  the  power  of  wind,  water  or  human  muscle ;  and 
and  set  up  the  factory  to  produce,  and  the  railroad  and 
the  steamboat  to  transport  the  factory  product. 

American  industry,  up  to  1812,  was  still  conducted  on 
the  old,  individualistic  lines.  Factories  were  little  known. 
Men  worked  singly,  or  by  twos  and  threes  in  sheds  or  work- 
rooms adjoining  their  homes.  The  people  lived  in  small 
villages  or  on  scattered  farms.  Within  the  century  Amer- 
ican industry  was  transformed.  Production  shifted  to  the 
factory;  about  the  factory  grew  up  the  industrial  city  in 
which  lived  the  tens  or  hundreds  of  thousands  of  factory 
workers  and  their  families. 

The  machine  made  a  new  society.  The  artisan  could  not 
compete  with  the  products  of  the  machine.  The  home  work- 
shop disappeared,  and  in  its  place  rose  the  factory,  with 
its  tens,  its  hundreds  and  its  thousands  of  operatives. 

Under  the  modern  system  of  machine  production,  each 
person  has  his  particular  duty  to  perform.  Each  depends, 
for  the  success  of  his  service,  upon  that  performed  by  thou- 
sands of  others. 

All  modern  industry  is  organized  on  the  principle 
of  cooperation,  division  of  labor,  and  specialization.  Each 
has  his  task,  and  unless  each  task  is  performed  the  entire 
system  breaks  down. 

Never  were  the  various  branches  of  the  military  service 
more  completely  dependent  upon  each  other  than  are  the 
various  departments  of  modern  economic  life.  No  man 
works  alone.  All  are  associated  more  or  less  intimately 
with  the  activities  of  thousands  and  millions  of  their 
fellows,  until  the  failure  of  one  is  the  failure  of  all,  and 
the  success  of  one  is  the  success  of  all. 

Such  a  development  could  have  only  one  possible  result, 
• — people  who  worked  together  must  live  together.    Scat- 


78  THE  AMERICAN  EMPIRE 


tered  villages  g'ave  place  to  industrial  towns  and  cities. 
People  were  compelled  to  cooperate  in  their  lives  as  well 
as  in  their  labor. 

The  theory  under  which  the  nev/  industrial  society  be- 
gan its  operations  was  "every  man  for  himself."  The  de- 
velopment of  the  system  has  made  every  man  dependent 
iipon  his  fellows.  The  principle  demanded  an  extreme  in- 
dividualism. The  practice  has  created  a  vast  network  of 
inter-relations,  that  leads  the  cotton  spinner  of  Massa- 
chusetts to  eat  the  meat  prepared  by  the  packing-house 
operative  in  Omaha,  while  the  pottery  of  Trenton  and  the 
clothing  of  New  York  are  sent  to  the  Yukon  in  exchange 
for  fish  and  to  the  Golden  Gate  for  fruit.  Inside  as  well  as 
outside  the  nation,  the  world  is  united  by  the  strong  hands 
of  economic  necessity.  None  can  live  to  himself,  alone. 
Each  depends  upon  the  labor  of  myriads  whom  he  has 
never  seen  and  of  whom  he  has  never  heard.  Whether  we 
will  or  no,  they  are  his  brothers-in-labor — ^united  in  the 
Atlas  fellowship  of  those  who  carry  the  world  upon  their 
shoulders. 

The  theory  of  "every  man  for  himself"  failed.  The 
practical  exigencies  involved  in  subjugating  a  continent  and 
wresting  from  nature  the  means  of  livelihood  made  it  neces- 
sary to  introduce  the  opposite  principle, — "In  Union  there 
is  strength;  cooperation  achieves  all  things." 


3.  The  Struggle  for  Organization 

The  technical  difficulties  involved  in  the  mechanical  pro- 
duction of  wealth  compelled  even  the  individualists  to  work 
together.  The  requirements  of  industrial  organization 
drove  them  in  the  same  direction. 

The  first  great  problem  before  the  early  Americans  was 
the  conquest  of  nature.  To  this  problem  the  machine  was 
the  answer.  The  second  problem  was  the  building  of  an 
organization  capable  of  handling  the  new  mechanism  of 
production — an  organization  large  enough,  elastic  enough, 


THE  AMERICAN  EMPIRE  79 


stable  enough  and  durable  enougb — to  this  problem,  the 
corporation  was  the  answer. 

The  machine  produced  the  goods.  The  corporation  di- 
rected the  production,  marketed  the  products  and  financed 
both  operations. 

The  corporation,  as  a  means  of  organizing  and  direct- 
ing business  enterprise  is  a  product  of  the  last  hundred 
years.  A  century  ago  the  business  of  the  United  States 
was  carried  on  by  individuals,  partnerships,  and  a  few 
joint  stock  companies.  At  the  time  of  the  last  Census,  more 
than  four-fifths  of  the  manufactured  products  were  turned 
out  under  corporate  direction ;  most  of  the  important  mining 
enterprises  were  corporate,  and  the  railroads,  public  utili- 
ties, banks  and  insurance  companies  were  virtually  all 
under  the  corporate  form  of  organization.  Thus  the  pas- 
sage of  a  century  has  witnessed  a  complete  revolution  in 
the  form  of  organizing  and  directing  business  enterprise. 

The  corporation,  as  a  form  of  business  organization  is 
immensely  superior  to  individual  management  and  to  the 
partnership. 

1.  The  corporation  has  perpetual  life.  In  the  eyes  of  the 
law,  it  is  a  person  that  lives  for  the  term  of  its  charter. 
Individuals  die ;  partnerships  are  dissolved ;  but  the  corpo- 
ration with  its  unbroken  existence,  possesses  a  continuity 
and  a  permanence  that  are  impossible  of  attainiiient  under 
the  earlier  forms  of  business  organization. 

2.  Liability,  under  the  corporation,  is  limited  by  the 
amount  of  the  investment.  The  liability  of  an  individual 
or  a  partner  engaged  in  business  was  as  great  as  his  ability 
to  pay.  The  investor  in  a  corporation  cannot  lose  a  sum 
larger  than  that  represented  by  his  investment. 

3.  The  corporation,  through  the  issuing  of  stocks  and 
bonds,  makes  it  possible  to  subdivide  the  total  amount  in- 
vested in  one  enterprise  into  many  small  units.^    These 

iThe  169  largest  railroads  in  the  United  States  have  issued  84,- 
418,796  shares  of  stock.  ("American  Labor  Year  Book,"  1017-18. 
p.  169.)  Theoretically,  therefore,  there  might  be  eighty-four  mil- 
lions of  owners  of  the  American  railroads. 


80  THE  AMERICAN  EMPIRE 


chances  for  small  investment  mean  that  a  large  number  of 
persona  may  join  in  subscribing  the  capital  for  a  business 
enterprise.  They  also  mean  that  one  well-to-do  person 
may  invest  his  wealth  in  a  score  or  a  hundred  enterprises, 
thus  reducing  the  risk  of  heavy  losses  to  a  minimum. 

4.  The  corporation  is  not,  as  were  the  earlier  forms  of 
organization,  necessarily  a  "one  man"  concern.  Many  cor- 
porations have  upon  their  boards  of  directors  the  leading 
business  men,  merchants,  bankers  and  financiers.  In  this 
way,  the  investing  public  has  the  assurance  that  the  enter- 
prise will  be  conducted  along  business  lines,  while  the  busi- 
ness men  on  the  board  have  an  opportunity  to  get  in  on 
the  "ground  floor." 

The  corporation  has  a  permanence,  a  stability,  and  a 
breadth  of  financial  support  that  are  quite  impossible  in  the 
case  of  the  private  venture  or  of  the  partnership.  It  does 
for  business  organization  what  the  machine  did  for  pro- 
duction. 

The  corporation  came  into  favor  at  a  time  when  business 
was  expanding  rapidly.  Surplus  was  growing.  Wealth 
and  capital  were  accumulating.  Industrial  units  were 
increasing  in  size.  It  was  necessary  to  find  some  means  by 
which  the  surplus  wealth  in  the  hands  of  many  individuals 
could  be  brought  together,  large  sums  of  capital  concen- 
trated under  one  unified  control,  the  investments,  thus 
secured,  safeguarded  against  untoward  losses,  and  the  busi- 
ness conservatively  and  efficiently  directed.  The  corpora- 
tion was  the  answer  to  these  needs. 

"United  we  stand"  proved  to  be  as  true  of  organizers  and 
investors  as  it  was  of  producers.  The  corporation  was  the 
common  denominator  of  people  with  various  industrial  and 
finanical  interests. 

The  corporation  played  another  role  of  vital  consequence. 
It  enabled  the  banker  to  dominate  the  business  world. 
Heretofore,  the  banker  had  dealt  largely  with  exchange. 
The  industrial  leader  was  his  equal  if  not  his  superior.     The 


THE  AMERICAN  EMPIRE  81 


organization  of  the  corporation  put  the  supreme  power  in 
the  hands  of  the  banker,  who  as  the  intermediary  between 
investor  and  producer,  held  the  purse  strings. 


4.  Capitalist  against  Capitalist 

The  early  American  enterprisers — the  pioneers — began  a 
single-handed  struggle  with  nature.  Necessity  forced  them 
to  cooperate.  They  established  a  new  industry.  The 
factory  brought  them  together.  They  organized  their  sys- 
tem of  industrial  direction  and  control.  The  corporation 
united  them.  They  turned  on  one  another  in  mortal  com- 
bat, and  the  frightfulness  of  their  losses  forced  them  to 
join  hands. 

The  business  men  of  the  late  nineteenth  century  had 
been  nurtured  upon  the  idea  of  competition.  *  *  Every  man 
for  himself  and  the  devil  take  the  hindermost ' '  summed  up 
their  philosophy.  Each  person  who  entered  the  business 
arena  was  met  by  an  array  of  savage  competitors  whose 
motto  was  "Victory  or  Death."  In  the  struggle  that  fol- 
lowed, most  of  them  suffered  death. 

Capitalist  set  himself  up  against  capitalist  in  bitter  strife. 
The  railroads  gouged  the  farmers,  the  manufacturers  and 
the  merchants  and  fought  one  another.  The  big  business 
organizations  drove  the  little  man  to  the  wall  and  then 
attacked  their  larger  rivals.  It  was  a  fight  to  the  finish 
with  no  quarter  asked  or  given. 

The  ' '  finish ' '  came  with  periodic  regularity  in  the  seven- 
ties, the  eighties  and  the  .nineties.  The  number  of  com- 
mercial failures  in  1875  was  double  the  number  of  1872. 
The  number  of  failures  in  1878  was  over  three  times  that 
of  1871.  The  same  thing  happened  in  the  eighties.  The 
liabilities  of  concerns  failing  in  1884  were  nearly  four  times 
the  liabilities  of  those  failing  in  1880.  The  climax  came 
in  the  nineties,  after  a  period  of  comparative  prosperity. 
Hard  times  began  in  1893.  Demand  dropped  off.  Produc- 
tion decreased.    Unemployment  was  widespread.    Wages 


82  THE  AMERICAN  EMPIRE 


fell.  Prices  went  clown,  down,  under  bitter  competitive  sel- 
ling, to  touch  rock  bottom  in  1896.  Business  concerns  con- 
tinued to  fight  one  another,  though  both  were  going  to  the 
wall.  Weakened  by  the  struggle,  unable  to  meet  the  com- 
petitive price  cutting  that  was  all  but  the  universal  business 
practice  of  the  time,  thousands  of  business  houses  closed 
their  doors.  The  effect  was  cumulative ;  the  fabric  of  credit, 
broken  at  one  point,  was  weakened  correspondingly  in  other 
places  and  the  guilty  and  the  innocent  were  alike  plunged 
into  the  morass  of  bankruptcy. 

The  destruction  wrought  in  the  business  world  by  the 
panic  of  1893  was  enormous.  The  number  of  commercial 
failures  for  1893  jumped  to  15,242.  The  amount  of  liabili- 
ties involved  in  these  failures  was  $346,780,000.  This  catas- 
trophe, coming  as  it  did  so  close  upon  the  heels  of  the 
panics  that  had  immediately  preceded  it,  could  not  fail  to 
teach  its  lesson.  Competition  was  not  the  life,  but  the 
death  of  trade.  "Every  man  for  himself"  as  a  policy  ap- 
plied in  the  business  world,  led  most  of  those  engaged  in  the 
struggle  over  the  brink  to  destruction.  There  was  but  one 
way  out — through  united  action. 

The  period  between  1897  and  1902  was  one  of  feverish 
activity  directed  to  coordinating  the  affairs  of  the  business 
world.  Trusts  were  formed  in  all  of  the  important  branches 
of  industry  and  trade.  The  public  looked  upon  the  trust 
as  a  means  of  picking  pockets  through  trade  conspiracies 
and  the  boosting  of  prices.  The  Sherman  Anti-Trust  Law 
had  been  passed  on  that  assumption.  In  reality,  the  trusts 
were  organized  by  far  seeing  men  who  realized  that  com- 
petition was  wasteful  in  practice  and  unsound  m  theory. 
The  idea  that  the  failure  of  one  bank  or  shoe  factory  v/as 
of  advantage  to  other  banks  and  shoe  factories,  had  not 
stood  the  test  of  experience.  The  tragedies  of  the  nineties 
had  showed  conclusively  that  an  injury  to  one  part  of  the 
commercial  fabric  was  an  injury  to  all  of  its  parts. 

The  generation  of  business  men  trained  since  1900  has 
had  no  illusions  about  competition.  Rather,  it  has  had  as 
its  object  the  successful  combination  of  various  forms  of 


THE  AMERICAN  EMPIRE  83 


business  enterprise  into  ever  larger  units.  First,  there  was 
the  uniting  of  like  industries; — cotton  mills  were  linked 
with  cotton  mills,  mines  with  mines.  Then  came  the  inte- 
gration of  industry — the  concentration  under  one  control 
of  all  of  the  steps  in  the  industrial  process  from  the  raw 
material  to  the  finished  product, — iron  mines,  coal  mines, 
blast  furnaces,  converters,  and  rail  mills  united  in  one  or- 
ganization to  take  the  raw  material  from  the  ground  and  to 
turn  out  the  finished  steel  product.  Last  of  all  there  was 
the  union  of  unlike  industries, — ^the  control,  by  one  group 
of  interests,  of  as  many  and  as  varied  activities  as  could  be 
brought  together  and  operated  at  a  profit.  The  lengths 
to  which  business  men  have  gone  in  combining  various  in- 
dustries is  well  shown  by  the  recent  investigation  of  the 
meat  packing  industry.  In  the  course  of  that  investiga- 
tion, the  Federal  Trade  Commission  was  able  to  show 
that  the  five  great  packers  (Wilson,  Armour,  Swift,  Morris 
and  Cudahy)  were  directly  affiliated  with  108  business 
enterprises,  including  12  rendering  companies;  18  stock- 
yard companies ;  8  terminal  railway  companies ;  9  manufac- 
turers of  packers'  machinery  and  supplies;  6  cattle  loan 
companies ;  4  public  service  corporations ;  18  banks,  and  a 
number  of  miscellaneous  companies,  and  that  they  con- 
trolled 2000  food  products  not  immediately  related  to  the 
packing  industry.- 

Business  is  consolidated  because  consolidation  pays — ^not 
primarily,  through  the  increase  of  prices,  but  through  the 
greater  stability,  the  lessened  costs,  and  the  growing  secur- 
ity that  has  accompanied  the  abolition  of  competition. 

Again  the  forces  of  social  organization  have  triumphed 
in  the  face  of  an  almost  universal  opposition.  American 
business  men  practiced  competition  until  they  found  that 
cooperation  was  the  only  possible  means  of  conducting 
large  affairs.  Theory  advised,  "Compete"!  Experience 
warned,  "Combine"!  Business  men — like  all  other  prac- 
tical people — accepted  the   dictates   of  experience  as  the 

2  Summary  of  tlie  Report  of  the  Federal  Trade  Commission  on  the 
Meat  Packing  Industry,  July  3,  1918,  Wash.,  Govt.  Print.,  1918. 


84  THE  AMERICAN  EMPIRE 


only  sound  basis  for  procedure.  Their  combination  solidi- 
fied their  ranks,  preparing  them  to  take  their  places  in  a 
closely  knit,  dominant  class,  with  clearly  marked  interests, 
and  a  strong  feeling  of  class  consciousness  and  solidarity. 

It  was  in  the  consummation  of  these  combinations,  inte- 
grations and  consolidations  that  the  investment  banker 
came  into  his  own  as  the  keystone  in  the  modern  industrial 
arch. 

5.  The  Investment  Banker 

The  investment  banker  is  the  directing  and  coordina- 
ting force  in  the  modern  business  world.  The  necessities 
of  factory  production  demanding  great  outlays  of  capital ; 
the  immense  financial  requirements  of  corporations;  the 
consolidation  of  business  ventures  on  a  huge  scale;  the 
broadened  use  of  corporate  securities  as  investments — all 
brought  the  investment  banker  into  the  foreground. 

Before  the  Spanish  "War,  the  investment  banker  financed 
the  trusts.  After  the  war  he  was  entrusted  with  the  vast 
surpluses  which  the  concentration  of  business  control  had 
placed  in  a  few  hands.  Business  consolidation  had  given 
the  banker  position.  The  control  of  the  surplus  brought 
him  power.  Henceforth,  all  who  wished  access  to  the 
world  of  great  industrial  and  commercial  affairs  must 
knock  at  his  door. 

This  concentration  of  economic  control  in  the  hands  of 
a  relatively  small  number  of  investment  bankers  has  been 
referred  to  frequently  as  the  *  *  Lloney  Trust, ' ' 

Investment  banking  monopoly,  or  as  it  is  sometimes 
called,  the  ** Money  Trust"  was  examined  in  detail  by 
the  Pujo  Committee  of  the  House  of  Representatives, 
which  presented  a  summary  of  its  report  on  February  28, 
1913.  The  committee  placed,  at  the  center  of  its  diagram 
of  financial  power,  J.  P.  Morgan  &  Co.,  the  National  City 
Bank,  the  First  National  Bank,  the  Guaranty  Trust  Co., 
and  the  Bankers  Trust  Co.,  all  of  New  York.  The  report 
refers  to  Lee,  Higginson  &  Co.,  of  Boston  and  New  York ; 


THE  AMERICAN  EMPIRE  85 


to  Kidder,  Peabody  &  Co.,  of  Boston  and  New  York,  and 
to  Kuhn,  Loeb  &  Co.,  of  New  York,  together  with  the  Mor- 
gan affiliations,  as  being  "the  most  active  agents  in  for- 
warding and  bringing  about  the  concentration  of  control 
of  money  and  credit"  (p.  56). 

The  methods  by  which  this  control  was  effected  are 
classed  by  the  Committee  "under  five  heads : — 

1.  *  *  Through  consolidations  of  competitive  or  potentially 
competitive  banks  and  trust  companies  which  consolida- 
tions in  turn  have  recently  been  brought  under  sympathetic 
management"  (p.  56). 

2.  Through  the  purchase  by  the  same  interests  of  the 
stock  of  competitive  institutions. 

3.  Through  interlocking  directorates. 

4.  "Through  the  influence  which  the  more  powerful 
banking  houses,  banks,  and  trust  companies  have  secured 
in  the  management  of  insurance  companies,  railroads,  pro- 
ducing and  trading  corporations  and  public  utility  corpora- 
tions, by  means  of  stock  holdings,  voting  trusts,  fiscal  agency 
contracts,  or  representation  upon  their  boards  of  directors, 
or  through  supplying  the  money  requirements  of  railway, 
industrial,  and  public  utility  corporations  and  thereby  be- 
ing enabled  to  participate  in  the  determination  of  their 
financial  and  business  policies"  (p.  56). 

5.  "Through  partnership  or  joint  account  arrangements 
between  a  few  of  the  leading  banking  houses,  banks,  and 
trust  companies  in  the  purchase  of  security  issues  of  the 
great  interstate  corporations,  accompanied  by  understand- 
ings of  recent  growth — sometimes  called  'banking  ethics* — 
which  have  had  the  effect  of  effectually  destroying  com- 
petition between  such  banking  houses,  banks,  and  trust 
companies  in  the  struggle  for  business  or  in  the  purchase 
and  sale  of  large  issues  of  such  securities"  (p.  56). 

Morgan  &  Co.,  the  First  National  Bank,  the  National 
City  Bank,  the  Bankers  Trust  Co.,  and  the  Guaranty  Trust 


86  THE  AMERICAN  EMPIRE 


Co.,  which  were  all  closely  affiliated,  had  extended  their 
coutrol  until  they  held, — 

118  directorships  in  34  banks  with  combined  resources 

of  $2,679,000,000. 
SO  directorships  in  10  insurance  companies  with  total 

assets  of  $2,293,000,000. 
105  directorships  in  32  transportation  systems  having 
a  total  capital  of  $11,784,000,000. 
63  directorships  in  24  producing  and  trading  com- 
panies having  a  total  capitalization  of  $3,339,- 
000,000. 
25  directorships  in  12  public  utility  corporations  with 
a  total  capitalization  of  $2,150,000,000. 

The  investment  banker  had  become,  what  he  was  ulti- 
mately bound  to  be,  the  center  of  the  system  built  upon 
the  century-long  struggle  to  control  the  wealth  of  the  con- 
tinent in  the  interest  of  the  favored  few  who  happened  to 
own  the  choicest  natural  gifts. 


6.  The  Cohesion  of  Wealth 

The  struggle  for  wealth  and  power,  actively  waged 
among  the  business  men  of  the  United  States  for  more 
than  a  century,  has  thus  by  a  process  of  elimination,  sub- 
ordination and  survival,  placed  a  few  small  groups  of 
strong  men  in  a  position  of  immense  economic  power. 
The  growth  of  surplus  and  its  importance  in  the  world 
of  affairs  has  made  the  investment  banker  the  logical 
center  of  this  business  leadership.  He,  with  his  immediate 
associates,  directs  and  controls  the  affairs  of  the  economic 
world. 

The  spirit  of  competition  ruled  the  American  business 
world  at  the  beginning  of  the  last  century,  the  forces  of 
combination  dominated  at  its  close.  The  new  order  was 
the  product  of  necessity,  not  of  choice.  The  life  of  the 
frontier  had  ingrained  in  men  an  individualism  that  chafed 


THE  AMERICAN  EMPIRE  87 


under  the  restraints  of  combination.  It  was  the  compelling 
forces  of  impending  calamity  and  the  opportunity  for 
greater  economic  advantage — not  the  traditions  or  ac- 
cepted standards  of  the  business  world — that  led  to  the 
establishment  of  the  centralized  wealth  power.  American 
business  interests  were  driven  together  by  the  battering  of 
economic  loss  and  lured  by  the  hope  of  greater  economic 
gains. 

Years  of  struggle  and  experience,  by  converting  a  scat- 
tered, individualistic  wealth  owning  class  into  a  highly 
organized,  closely  knit,  homogeneous  group  with  its  com- 
mon interests  in  the  development  of  industry  and  the  safe- 
guarding of  property  rights,  have  brought  unity  and 
power  to  the  business  world. 

Individually  the  members  of  the  wealth-controlling  class 
have  learned  that  "in  union  there  is  strength";  collec- 
tively they  are  gripped  by  the  "cohesion  of  wealth" — ^the 
class  conscious  instinct  of  an  associated  group  of  human 
beings  who  have  much  to  gain  and  everything  to  lose. 


88  JHE  AMERICAN  EMPIRE 

VIII.     THEIR  UNITED  STATES 

1.  Translating  Wealth  into  Power 

The  first  object  of  the  economic  struggle  is  wealth.  The 
second  is  power. 

At  the  end  of  their  era  of  competition,  the  leaders  of 
American  business  found  themselves  masters  of  such  vast 
stores  of  wealth  that  they  were  released  from  the  paralyz- 
ing fear  of  starvation,  and  were  guaranteed  the  comforts 
and  luxuries  of  life.  Had  these  men  sought  wealth  as  a 
means  of  satisfying  their  physical  needs  their  object  would 
have  been  attained. 

The  gratification  of  personal  wants  is  only  a  minor  ele- 
ment in  the  lives  of  the  rich.  After  they  have  secured  the 
things  desired,  they  strive  for  the  power  that  will  give 
them  control  over  their  fellows. 

The  possession  of  things,  is,  in  itself,  a  narrow  field.  The 
control  over  productive  machinery  gives  him  who  exer- 
cises it  the  power  to  enjoy  those  things  which  the  workers 
with  machinery  produce.  The  control  over  public  affairs 
and  over  the  forces  that  shape  public  opinion  give  him  who 
exercises  it  the  power  to  direct  the  thoughts  and  lives  of 
the  people.  It  is  for  these  reasons  that  the  keen,  self- 
assertive,  ambitious  men  who  have  come  to  the  top  in  the 
rough  and  tumble  of  the  business  struggle  have  steadily  ex- 
tended their  ownership  and  their  control. 

2.  The  Wealth  of  the  United  States 

The  bulk  of  American  wealth,  which  consists  for  the 
most  part  of  land  and  buildings,  is  concentrated  in  the 
centers  of  commerce  and  industry — in  the  regions  of  su- 
preme business  power. 


THE  AMERICAN  EMPIRE  89 


The  last  detailed  estimate  of  the  wealth  of  the  United 
States  was  made  by  the  Census  Bureau  for  the  year  1912. 
At  that  time,  the  total  wealth  of  the  country  was  placed 
at  $187,739,000,000.  (The  estimate  for  1920  is  $500,000,- 
000,000.)  Roughly  speaking,  this  represented  an  esti- 
mate of  exchangeable  values.  The  figures,  at  best,  are 
rough  approximations.  Their  importance  lies,  not  in  their 
accuracy,  but  in  the  picture  wliich  they  give  of  relationships. 


The   Total   Wealth   of   the   United   States,    Classified   by 

Groups,  with  the  Percentage  of  the  Total 

Wealth  in  Each  Group  ^ 

Total  Estimated 
Wealth 

Amount 

(000,000      Per  Cent 
Wealth  Groups  Omitted)      of  Total 

1.  Real  Property  (land  and  buildings)   $110,676  59 

2.  Public   Utilities    (railroads,    street 

railways,    telegraph,    telephone, 

electric  light,  etc. ) 26,415  14 

3.  Live   Stock    and   Machinery    (live 

stock,  farm  implements  and  man- 
ufacturing machinery)   13,697  7 

4.  Raw  Materials,  Manufactured  Prod- 

ucts,    Merchandise      (including 

gold  and  silver  bullion) 24,193  13 

5.  Personal      Possessions      (clothing, 

personal  adornments,  furniture, 

carriages,  etc.)   12,758  7 

Total  of  all  groups $187,739         100 


1  "Estimated   Valuation  of   National   Wealth,   1850-1912,"   Bureau 
of  the  Census,  1915,  p.  15. 


90  THE  AMERICAN  EMPIRE 


The  bulk  of  the  exchangeable  wealth  of  the  United 
States  consists  of  "productive"  or  'investment"  property. 
If,  to  the  total  of  110  billions  given  by  the  Census  as  the 
value  of  real  property,  are  added  the  real  property  values 
of  the  public  utilities,  the  total  will  probably  exceed  three 
quarters  of  the  total  v^'ealth  of  the  United  States,  If,  in 
addition,  account  is  taken  of  the  fact  that  much  of  the  wealth 
classed  as  ' '  raw  materials,  etc., ' '  is  the  immediate  product 
of  the  land  (coal,  ore,  timber),  some  idea  may  be  obtained 
of  the  extent  to  which  the  estimated  wealth  of  the  coun- 
try is  in  the  form  of  land,  its  immediate  products,  and 
buildings.  Furthermore,  it  must  be  remembered  that  great 
quantities  of  ore  lands,  timber  lands,  waterpower  sites, 
etc.,  are  assessed  at  only  a  fraction  of  their  total  present 
value. 

The  personal  property  of  the  country  is  valued  at  less 
than  one  fourteenth  of  the  total  wealth.  It  is  in  reality 
a  negligible  item,  as  compared  with  the  value  of  the  real 
property,  of  the  public  utilities,  and  of  the  raw  materials 
and  products  of  industry. 

The  wealth  of  the  United  States  is  in  permanent  form — 
land  and  improvements;  personal  possessions  are  a  mere 
incident  in  the  total.  In  truth,  American  wealth  is  in  the 
main  productive  (business)  wealth,  designed  for  the  fur- 
ther production  of  goods,  rather  than,  for  the  satisfaction 
of  human  wants. 

3.  Ownership  and  Control 

Who  owns  this  vast  wealth?  It  is  impossible  to  answer 
the  question  with  anything  like  definiteness.  Figures  have 
been  compiled  to  show  that  five  per  cent  of  the  people 
own  two-thirds  to  three-quarters  of  it;  that  the  poorest 
two-thirds  of  the  people  own  five  per  cent  of  it,  and  that 
the  well-to-do  or  middle  class  own  the  remainder.  These 
figures  would  make  it  appear  that  more  than  one-fourth 
of  the  population  is  in  the  middle  class.  If  the  income- 
tax  returns  are  to  be  trusted  this  proportion  is  far  too 


THE  AMERICAN  EMPIRE  91 


high.  On  all  hands  it  is  admitted  that  the  wealth  of  the 
country  is  concentrated  in  the  hands  of  a  small  fraction 
of  the  people  and  the  important  wealth — that  is,  the  wealth 
upon  which  production,  transportation  and  exchange  de- 
pends— is  in  still  fewer  hands. 

Neither  the  total  wealth  of  the  country,  nor  that  portion 
of  the  total  which  is  owned  directly  by  the  propertied 
class  is  of  most  immediate  moment.  Ownership  does  not 
necessarily  involve  control.  A.  puddler  in  the  Gary  Mills 
may  own  five  shares  of  stock  in  the  Steel  Corporation 
without  ever  raising  his  voice  to  determine  the  corporation 
policy.  This  is  ownership  without  control.  On  the  other 
hand,  a  banking  house  through  a  voting  trust  agreement, 
may  control  the  policy  of  a  corporation  in  which  it  does 
not  own  one  per  cent  of  the  stock.  This  is  control  with- 
out ownership.  Ownership  may  be  quite  incidental.  It  is 
control  that  counts  in  terms  of  power. 

Most  of  the  property  owners  in  the  United  States  play 
no  part  in  the  control  of  prices  or  of  production,  in  the 
direction  of  economic  policy,  or  in  the  management  of 
economic  affairs. 

Theoretically,  stockholders  direct  the  policies  of  corpora- 
tions, and,  therefore,  each  holder  of  5  or  10  shares  of 
corporate  stock  would  play  a  part  in  deciding  economic 
affairs.  Practically,  the  small  stockholder  has  no  part  in 
business  control. 

The  small  farmer — the  small  business  man  of  largest 
numerical  consequence — ^has  been  exploited  by  the  great 
interests  for  two  generations.  Despite  his  numbers  and 
his  organizations,  despite  his  frequent  efforts,  through 
anti-trust  laws,  railway  control  laws,  banking  reform  laws, 
and  the  like,  he  has  little  voice  in  determining  important 
economic  policies. 

The  small  savings  bank  depositor  or  the  holder  of  an 
ordinary  insurance  policy  is  a  negative  rather  than  a  posi- 
tive factor  in  economic  control.  Not  only  does  he  exercise 
no  power  over  the  dollar  which  he  has  placed  with  the 


92  THE  AMERICAN  EMPIRE 


bank  or  with  the  insurance  company,  but  he  has  thereby 
strengthened  the  hands  of  these  organizations.  Each  dol- 
lar placed  with  the  financier  is  a  dollar's  more  power  for 
him  and  his. 

Suppose — the  impossible — that  half  of  the  families  in 
the  United  States  "own  property."  Subtract  from  this 
number  the  small  stockholders;  the  holders  of  bonds,  notes 
and  mortgages;  the  small  tradesman;  the  small  farmer; 
the  home  owner  and  the  owner  of  a  savings-bank  deposit 
or  of  an  insurance  policy — what  remains?  There  are  the 
large  stockliolders,  the  owners  and  directors  of  important 
industries,  public  utilities,  banks,  trust  companies  and  in- 
surance companies.  These  persons,  in  the  aggregate,  con- 
stitute a  fraction  of  one  per  cent  of  the  adult  population 
of  the  United  States. 

Start  with  the  total  non-personal  wealth  of  the  country, 
subtract  from  it  the  share-values  of  the  small  stockholders ; 
the  values  of  all  bonds,  mortgages  and  notes ;  the  property 
of  the  small  tradesman  and  the  small  farmer ;  the  value  of 
homes — what  remains?  There  are  left  the  stocks  in  the 
hands  of  the  big  stockliolders;  the  properties  owned  and 
directed  by  the  owners  and  directors  of  important  indus- 
tries, public  utilities,  banks,  trust  companies  and  insurance 
companies.  This  wealth  in  the  aggregate  probably  makes 
up  less  than  10  per  cent  of  the  total  wealth  of  the  country 
and  yet  the  tiny  fraction  of  the  population  which  owns 
this  wealth  can  exercise  a  dictatorial  control  over  the  eco- 
nomic policies  that  underlie  American  public  life. 

4.  The  Avenues  of  Mastery 

While  control  rests  back  directly  or  indirectly  upon  some 
form  of  ownership,  most  owners  exercise  little  or  no  con- 
trol over  economic  affairs.  Instead  they  are  made  the  vic- 
tims of  a  social  system  under  which  one  group  lives  at  the 
expense  of  another. 

Against  this  tendency  toward  control  by  one  group  or 
class  (usually  a  minority)  over  the  lives  of  another  group 


THE  AMERICAN  EMPIRE  93 


or  class  (usually  a  majority)  the  human  spirit  always  has 
revolted.  The  United  States  in  its  earlier  years  was  an 
embodiment  of  the  spirit  of  that  revolt.  President  Wil- 
son characterized  it  excellently  in  1916.  Speaking  of  the 
American  Flag,  he  said, — "That  flag  was  originally  stained 
in  very  precious  blood,  blood  spilt,  not  for  any  dynasty, 
nor  for  any  small  controversies  over  national  advantage, 
but  in  order  that  a  little  body  of  three  million  men  in 
America  might  make  sure  that  no  man  was  their  master. ' '  ^ 

Against  mastery  lovers  of  liberty  protest.  Mastery 
means  tyranny ;  mastery  means  slavery. 

Mastery  has  always  been  based  upon  some  form  of  owner- 
ship. There  is  in  the  United  States  a  group,  growing  in 
size,  of  people  who  take  more  in  keep  than  they  give  in 
service ;  people  who  own  land ;  franchises ;  stocks  and  bonds 
and  mortgages ;  real  estate  and  other  forms  of  investment 
property;  people  who  are  living  without  ever  lifting  a 
finger  in  toil,  or  giving  anything  in  labor  for  an  unceasing 
stream  of  necessaries,  comforts  and  luxuries.  These  peo- 
ple, directly  or  indirectly,  are  the  owners  of  the  productive 
machinery  of  the  United  States, 

Historically  there  have  been  a  number  of  stages  in  the 
development  of  mastery.  First,  there  was  the  ownership 
of  the  body.  One  man  owned  another  man,  as  he  might 
own  a  house  or  a  pile  of  hides.  At  another  stage,  the 
owner  of  the  land — the  feudal  baron  or  the  landlord — said 
to  the  tenant,  who  worked  on  his  land :  ' '  You  stay  on  my 
land.  You  toil  and  work  and  make  bread  and  I  will  eat 
it. ' '  The  present  system  of  mastery  is  based  on  the  owner- 
ship by  one  group  of  people,  of  the  productive  wealth  upon 
which  depends  the  livelihood  of  all.  The  masters  of  pres- 
ent day  economic  society  have  in  their  possession  the  nat- 
ural resources,  the  tools,  the  franchises,  patents,  and  the 
other  phases  of  the  modern  industrial  system  with  which 
the  people  must  work  in  order  to  live.  The  few  who  own 
and  control  the  productive  wealth  have  it  in  their  power 

8  "Addresses  of  President  Wilson,"  House  Doc.  803.  Sixty-fourth 
Congress,  1st  Session  (1916),  p.  13. 


94  THE  AMERICAN  EMPIRE 


to  say  to  the  many  wlio  neither  own  nor  control, — "You 
may  work  or  you  may  not  work."  If  the  masses  obtahi 
work  under  these  conditions  the  owners  can  say  to  theiu 
further, — "You  work,  and  toil  and  earn  bread  and  we 
will  eat  it."  Thus  the  few,  deriving  their  power  from  the 
means  by  which  their  fellows  must  work  for  a  living, 
own  the  jobs. 

5.  The  Mastery  of  J  oh -Ownership 

Job-ownership  is  the  foundation  of  the  latest  and  prob- 
ably the  most  complete  system  of  mastery  ever  perfected. 
The  slave  was  held  only  in  physical  bondage.  Behind 
serfdom  there  was  land  ownership  and  a  religious  sanc- 
tion. "Divine  right"  and  ''God's  anointed,"  were 
terms  used  to  bulwark  the  position  of  the  owning  class, 
who  made  an  effort  to  dominate  the  consciences  as  well 
as  the  bodies  of  their  serfs.  Job-ownership  owes  its  effec- 
tiveness to  a  subtle,  psychological  power  that  overwhelms 
the  unconscious  victim,  making  him  a  tool,  at  once  easy  to 
handle  and  easy  to  discard. 

The  system  of  private  o^vnership  that  succeeded  Feudal- 
ism taught  the  lesson  of  economic  ambition  so  thoroughly 
that  it  has  permeated  the  whole  world.  The  conditions  of 
eighteenth  century  life  have  passed,  perhaps  forever,  but 
its  psychology  lingers  everywhere. 

The  job-holder  has  been  taught  that  he  must  "get 
ahead"  in  the  world;  that  if  he  practices  the  economic  vir- 
tues,— thrift,  honesty,  earnestness,  persistence,  efficiency — 
he  will  necessarily  receive  great  economic  reward;  that  he 
must  support  his  family  on  the  standard  set  by  the  com- 
munity, and  that  to  do  all  of  these  essential  things,  he 
must  take  a  job  and  hold  on  to  it.  Having  taken  the  job, 
he  finds  that  in  order  to  hold  it,  he  must  be  faithful  to 
the  job-OA\aier,  even  if  that  involves  faithlessness  to  his 
own  ideas  and  ideals,  to  his  health,  his  manhood,  and  the 
lives  of  his  wife  and  children. 


THE  AMERICAN  EMPIRE  95 


The  driving  power  in  slavery  was  the  lash.  Under 
serfdom  it  was  the  fear  of  hunger.  The  modern  system 
of  job-ownership  owes  its  effectiveness  to  the  fact  that  it 
has  been  built  upon  two  of  the  most  potent  driving  forces  in 
all  the  world — hunger  and  ambition — the  driving  force 
that  comes  from  the  empty  stomach  and  the  driving  force 
that  comes  from  the  desire  for  betterment.  Thus  job- 
owning,  based  upon  an  automatic  self-drive  principle,  en- 
ables the  job-owner  to  exact  a  return  in  faithful  service 
that  neither  slavery  nor  serfdom  ever  made  possible.  Job- 
owning  is  thus  the  most  thorough-going  form  of  mastery 
yet  devised  by  the  ingenuity  of  man. 

Unlike  the  slave  owner  and  the  Feudal  lord  the  modern 
job-owner  has  no  responsibility  to  the  job-holder.  The 
slave  owner  must  feed,  clothe  and  house  his  slave — other- 
wise he  lost  his  property.  The  Feudal  lord  must  protect 
and  assist  his  tenant.  That  was  a  part  of  his  bargain  with 
his  overlord.  The  modern  job-owner  is  at  liberty,  at  any 
time,  to  "discharge"  the  job-holder,  and  by  throwing  him 
out  of  work  take  away  his  chance  of  earning  a  living. 
While  he  keeps  the  job-holder  on  his  payroll,  he  may  pay 
him  impossibly  low  wages  and  overwork  him  under  con- 
ditions that  are  unfit  for  the  maintenance  of  decent  hu- 
man life.  Barring  the  factory  laws  and  the  health  laws, 
he  is  at  liberty  to  impose  on  the  job-holder  any  form  of 
treatment  that  the  job-holder  will  tolerate. 

There  is  no  limit  to  the  amount  of  industrial  property 
that  one  man  may  own.  Therefore,  there  is  no  limit  to 
the  number  of  jobs  he  may  control.  It  is  possible  (not 
immediately  likely)  that  one  coterie  of  men  might  secure 
possession  of  enough  industrial  property  to  control  the 
jobs  of  all  of  the  gainfully  occupied  people  in  American 
industry.  If  this  result  could  be  achieved,  these  tens  of 
millions  would  be  able  to  earn  a  living  only  in  case  the 
small  coterie  in  control  permitted  them  to  do  so. 

Job  ownership  is  built,  of  necessity,  on  the  ownership 
of  land,  resources,  capital,  credit,  franchises,  and  other 
special  privileges.     But  its  power  of  control  goes  far  be- 


96  THE  AMERICAN  EMPIRE 

yoncl  this  mere  phj^sical  ownership  into  the  realms  of  so- 
cial psychology. 

The  early  colonists,  who  fled  from  the  economic,  political, 
social  and  religious  tyranny  of  feudalism,  believed  that 
liberty  and  freedom  from  unjust  mastery  lay  in  the  pri- 
vate ownership  of  the  job.  They  had  no  thought  of  the 
modem  industrial  machine. 

The  abolitionists  who  fought  slavery  believed  that  free- 
dom and  liberty  could  be  obtained  by  unshackling  the 
body.     They  did  not  foresee  the  shackled  mind. 

The  modern  world,  seeking  freedom;  yearning  for  lib- 
erty and  justice;  aiming  at  the  overthrow  of  the  mastery 
that  goes  with  irresponsible  power,  finds  to  its  dismay  that 
the  ownership  of  the  job  carries  with  it,  not  only  economic 
mastery,  but  political,  social  and  even  religious  mastery, 
as  well. 

6.  The  Ownership  of  the  Product 

The  industrial  overlord  holds  control  of  the  job  with  one 
hand.  With  the  other  he  controls  the  product  of  industry. 
From  the  time  the  raw  material  leaves  the  earth  in  the 
form  of  iron  ore,  crude  petroleum,  logs,  or  coal,  through  all 
of  the  processes  of  production,  it  is  owned  by  the  indus- 
trial master,  not  by  the  worker.  Workers  separate  the 
product  from  the  earth,  transport  it,  refine  it,  fabricate  it. 
Always,  the  product,  like  the  machinery,  is  the  possession 
of  the  owning  class. 

While  industry  was  competitive,  the  pressure  of  competi- 
tion kept  prices  at  a  cost  level,  and  the  exploiting  power 
of  the  owner  was  confined  to  the  job-holder.  To-day, 
through  combinations  and  consolidations,  industry  has 
ceased  to  be  competitive,  and  the  exploiting  power  of  the 
job-owner  is  extended  through  his  ownership  of  the  product. 

The  modern  town-dweller  is  almost  wholly  in  the  hands 
of  the  private  owners  of  the  products  upon  which  he  de- 
pends.    The  ordinary   city   dweller  spends  two-fifths  of 


THE  AMERICAN  EMPIRE  97 


his  income  for  food ;  one«fif th  for  rent,  fuel  and  light,  and 
one-fifth  for  clothes.  Food,  houses,  fuel  (with  the  excep- 
tion of  gas  supply  in  some  cities),  and  clothing  are  privately 
owned.  The  public  ownership  of  streets  and  water  works, 
of  some  gas,  electricity,  street  cars,  and  public  markets,  is 
a  negligible  factor  in  the  problem.  The  private  monopolist 
has  the  upper  hand  and  he  is  able  through  the  control  of 
transportation,  storage,  and  merchandising  facilities,  to 
make  handsome  profits  for  the  ** service"  which  he  renders 
the  consumer. 

7.  The  Control  of  the  Surplus 

The  wealth  owners  are  doubly  entrenched.  They  own 
the  jobs  upon  which  most  families  depend  for  a  living. 
They  own  the  necessaries  of  life  which  most  families  must 
purchase  in  order  to  live.  Further,  they  control  the  sur- 
plus wealth  of  the  community. 

There  are  three  principal  channels  of  surplus.  First  of 
all  there  is  the  surplus  laid  aside  by  business  concerns, 
reinvested  in  the  business,  spent  for  new  equipment  and 
disposed  of  in  other  ways  that  add  to  the  value  of  the 
property.  Second,  there  are  the  19,103  people  in  the 
United  States  with  incomes  of  $50,000  or  more  per  year; 
the  30,391  people  with  incomes  of  $25,000  to  $50,000  per 
year  and  the  12,502  people  with  incomes  of  $10,000  to 
$25,000  per  year.  (Figures  for  1917.)  Many,  if  not  most 
of  these  rich  people,  carry  heavy  insurance,  invest  in  se- 
curities, or  in  some  other  way  add  to  surplus.  In  the  third 
place  there  are  the  small  investors,  savings-bank  deposi- 
tors, insurance  policy  holders  who,  from  their  income,  have 
saved  something  and  have  laid  it  aside  for  the  rainy  day. 
The  masters  of  economic  life — bankers,  insurance  men,  prop- 
erty holders,  business  directors — are  in  control  of  all  three 
forms  of  surplus. 

The  billions  of  surplus  wealth  that  come  each  year  un- 
der the  control  of  the  masters  carry  with  them  an  immense 
authority  over  the  affairs  of  the  community.     The  owners 


98  THE  AMERICAN  EMPIRE 


of  wealth  owe  much  of  their  immediate  power  to  the  fact 
that  they  control  this  surplus,  and  are  in  a  position  to 
direct  its  fiov/  into  such  channels  as  they  may  select. 


8.  The  Channels  of  Puhlic  Opinion 

No  one  can  question  the  control  which  business  interests 
exercise  over  the  jobs,  the  industrial  product,  and  the 
economic  surplus  of  the  community.  These  facts  are  uni- 
versally admitted.  But  the  corollaries  which  flow  naturally 
from  such  axioms  are  not  so  readily  accepted.  Yet  given 
the  economic  power  of  the  business  world,  the  control  over 
the  channels  of  public  opinion  and  over  the  machinery  of 
government  follows  as  a  matter  of  course. 

The  channels  of  public  opinion — the  school,  the  press, 
the  pulpit, — are  not  directly  productive  of  tangible  eco- 
nomic goods,  yet  they  depend  upon  tangible  economic  goods 
for  their  maintenance.  Whence  should  these  goods  come? 
Whence  but  from  the  system  that  produces  them,  through 
the  men  who  control  that  system!  The  plutocracy  exer^ 
cises  its  power  over  the  channels  of  public  opinion  in  two 
ways, — the  first,  by  a  direct  or  business  office  control ;  and 
second,  by  an  indirect  or  social  prestige  control. 

The  business  office  control  is  direct  and  simple.  Schools, 
colleges,  newspapers,  magazines  and  churches  need  money. 
They  cannot  produce  tangible  wealth  directly,  and  they 
m.ust,  therefore,  depend  upon  the  surplus  which  arises  from 
the  productive  activities  of  the  economic  world.  Who  con- 
trols that  surplus?  Business  men.  Who,  then,  is  in  a 
position  to  dictate  terms  in  financial  matters?  Who  but 
the  dominant  forces  in  business  life  ? 

The  facts  are  incontrovertible.  It  is  not  mere  chance 
that  recruits  the  overwhelming  majority  of  school-board 
members,  college  trustees,  newspaper  managers,  and  church 
vestrymen,  from  the  ranks  of  successful  business  and  pro- 
fessional men.  It  is  necessary  for  the  educator,  the  jour- 
nalist,  and  the  minister  to   work  through  these  men  in 


THE  AMERICAN  EMPIRE  99 


order  to  secure  the  "sinews  of  war."  They  are  at  the 
focal  points  of  power  because  they  control  the  sources  of 
surplus  wealth. 

The  second  method  of  maintaining  control — through  the 
control  of  social  prestige — is  indirect,  but  none  the  less 
effective.  The  young  man  in  college;  the  young  graduate 
looking  for  a  job ;  the  young  man  rising  in  his  profession, 
and  the  man  gaining  ascendancy  in  his  chosen  career  are 
brought  into  constant  contact  with  the  ''influential"  mem- 
bers of  the  business  world.  It  is  the  business  world  that 
dominates  the  clubs  and  the  vacation  spots;  it  is  the  busi- 
ness world  that  is  met  in  church,  at  the  dinner  tables  and 
at  the  social  gathering. 

The  man  who  would  "succeed"  must  retain  the  favor  of 
this  group.  He  does  so  automatically,  instinctively  or  semi- 
consciously — it  is  the  common,  accepted  practice  and  he 
falls  in  line. 

The  masters  need  not  bribe.  They  need  not  resort  to 
illegal  or  unethical  methods.  The  ordinary  channels  of 
advertising,  of  business  acquaintance  and  patronage,  of 
philanthropy  and  of  social  intercourse  clinch  their  power 
over  the  channels  of  public  opinion. 


9.  The  Control  of  Political  Machinery 

The  American  government, — city,  state  and  nation — is 
in  almost  the  same  position  as  the  schools,  newspapers  and 
churches.  It  does  not  turn  out  tangible,  economic  prod- 
ucts. It  depends,  for  its  support,  upon  taxes  which  are 
levied,  in  the  first  instance,  upon  property.  Who  are  the 
owners  of  this  property?  The  business  interests.  Who, 
therefore,  pay  the  bills  of  the  government?  The  business 
interests. 

Nowhere  has  the  issue  been  stated  more  clearly  or  more 
emphatically  than  by  Woodrow  Wilson  in  certain  passages 
of  his  "New  Freedom."     As   a  student  of  politics   and 


100  THE  AMERICAN  EMPIRE 


government — particularly  the  American  Government — ^he 
sees  the  power  which  those  who  control  economic  life  are 
able  to  exercise  over  public  affairs,  and  realizes  that  their 
influence  has  grown,  until  it  overtops  that  of  the  political 
world  so  completely  that  the  machinery  of  politics  is  un- 
der the  domination  of  the  organizers  and  directors  of 
industry. 

"We  know,"  writes  Mr.  Wilson  in  **The  New  Freedom,** 
*'that  something  intervenes  between  the  people  of  the 
United  States  and  the  control  of  their  own  affairs  at  Wash- 
ington. It  is  not  the  people  who  have  been  ruling  there 
of  late"  (p.  28).  ''The  masters  of  the  government  of 
the  United  States  are  the  combined  capitalists  and  manu- 
facturers of  the  United  States.  .  .  .  Suppose  you  go  to 
Washington  and  try  to  get  at  your  government.  You 
will  always  find  that  while  you  are  politely  listened  to, 
the  men  really  consulted  are  the  men  who  have  the  biggest 
stakes — the  big  bankers,  the  big  manufacturers,  the  big 
masters  of  commerce,  the  heads  of  railroad  corporations 
and  of  steamship  corporations.  .  .  .  Every  time  it  has  come 
to  a  critical  question,  these  gentlemen  have  been  yielded 
to  and  their  demands  have  been  treated  as  the  demands 
that  should  be  followed  as  a  matter  of  course.  The  gov- 
ernment of  the  United  States  at  present  is  a  foster-child 
of  the  special  interests"  (p.  57-58).  **The  organization 
of  business  has  become  more  centralized,  vastly  more  cen- 
tralized, than  the  political  organization  of  the  country  it- 
self" (p,187).  **An  invisible  empire  has  been  set  up  above 
the  forms  of  democracy"  (p.  35).  **We  are  all  caught  in 
a  great  economic  system  which  is  heartless"  (p.  10). 

This  is  the  direct  control  exercised  by  the  plutocracy 
over  the  machinery  of  government.  Its  indirect  control 
is  no  less  important,  and  is  exercised  in  exactly  the  same 
way  as  in  the  case  of  the  channels  of  public  opinion. 

Lawyers  receive  preferment  and  fees  from  business — 
there  is  no  other  large  source  of  support  for  lawyers. 
Judges  are  chosen  from  among  these  same  lawyers.^  Usu- 
ally they  are  lawyers  who  have  won  preferment  and  emolu- 


THE  AMERICAN  EMPIRE  101 


ment.  Legislators  are  lawyers  and  business  men,  or  the 
representatives  of  lawyers  and  business  men.  The  result 
is  as  logical  as  it  is  inevitable. 

The  wealth  owners  control  the  machinery  of  government 
because  they  pay  the  taxes  and  provide  the  campaign  funds. 
They  control  public  officials  because  they  have  been,  are, 
or  hope  to  be,  on  the  payrolls,  or  participants  in  the  profits 
of  industrial  enterprises. 

10.  It  is  ''Their  United  States" 

The  man  fighting  for  bread  has  little  time  to  "turn  his 
eyes  up  to  the  eternal  stars.  ' '  The  western  cult  of  efficiency 
makes  no  allowances  for  philosophic  propensities.  Its  ob- 
ject is  product  and  it  is  satisfied  with  nothing  short  of  that 
sordid  goal. 

The  members  of  the  wealth  owning  class  are  relieved 
from  the  food  struggle.  Their  ownership  of  the  social 
machinery  guarantees  them  a  secure  income  from  which 
they  need  make  no  appeal.  These  privileges  provide  for 
them  and  theirs  the  leisure  and  the  culture  that  are  the 
only  possible  excuse  for  the  existence  of  civilization. 

The  propertied  class,  because  it  owns  the  jobs,  the  in- 
dustrial products,  the  social  surplus,  the  channels  of  pub- 
lic opinion  and  the  political  machinery  also  enjoys  the 
opportunity  that  goes  with  adequately  assured  income, 
leisure  and  culture. 

The  members  of  the  dominant  economic  class  hold  a  key 
— property  ownership — which  opens  the  structure  of  social 
wealth.  Those  who  have  access  to  this  key  are  the  blessed 
ones.    Theirs  are  the  things  of  this  world. 

The  property  owners  enjoy  the  fleshpots.  They  hold  the 
vantage  points.  The  vital  forces  are  in  their  hands.  Eco- 
nomically, politically,  socially,  they  are  supreme. 

If  the  control  of  material  things  can  make  a  group  se- 
cure, the  wealth  owners  in  the  tfnited  States  are  secure. 
They  hold  property,  prestige,  power. 

The  phrase  "our  United  States"  as  used  by  the  great 


102  THE  AMERICAN  EMPIRE 


majority  of  the  people  is  a  misnomer.  With  the  exception 
of  a  theoretically  valuable  but  practically  unimportant 
right  called  ''freedom  of  contract,"  the  majority  of  the 
wage  earners  in  the  United  States  have  no  more  excuse 
for  using  the  phrase  "our  United  States"  than  the  slaves 
in  the  South,  before  the  war,  for  saying  "our  Southland." 

The  franchise  is  a  potential  power,  making  it  theoretically 
possible  for  the  electorate  to  take  possession  of  the  country. 
In  practice,  the  franchise  has  had  no  such  result.  Quite 
the  contrary,  the  masters  of  American  life  by  a  policy  of 
chicanery  and  misrepresentation,  advertise  and  support 
first  one  and  then  the  other  of  the  ''Old  Parties,"  both 
of  which  are  led  by  the  members  of  the  propertied  class 
or  by  their  retainers.  The  people,  deluded  by  the  press, 
and  ignorant  of  their  real  interests,  go  to  the  polls  year 
after  year  and  vote  for  representatives  that  represent,  in 
all  of  their  interests,  the  special  privileged  classes. 

The  economic  and  social  reorganization  of  the  United 
States  during  the  past  fifty  years  has  gone  fast  and  far. 
The  system  of  perpetual  (fee  simple)  private  ownership 
of  the  resources  has  concentrated  the  control  over  the 
natural  resources  in  a  small  group,  not  of  individuals,  but 
of  corporations;  has  created  a  new  form  of  social  master, 
in  the  form  of  a  land-tool-job  owner;  has  thus  made  pos- 
sible a  type  of  absentee-landlordism  more  effective  and  less 
human  than  were  any  of  its  predecessors  and  has  decreased 
the  responsibility  at  the  same  time  that  it  has  augmented 
the  power  of  the  owning  group.  These  changes  have  been 
an  integral  part  of  a  general  economic  transformation  that 
has  occupied  the  chief  energies  of  the  ablest  men  of  the 
community  for  the  past  two  generations. 

The  country  of  many  farms,  villages  and  towns,  and  of 
a  few  cities,  with  opportunity  free  and  easy  of  access,  has 
become  a  country  of  highly  organized  concentrated  wealth 
power,  owned  by  a  small  fraction  of  the  people  and  con- 
trolled by  a  tiny  minority  of  the  owners  for  their  benefit 
and  profit.  The  country  which  was  rightfully  called  "our 
United  States"  in  1840,  by  1920  was  "their  United  States" 
in  every  important  sense  of  the  word. 


THE  AMERICAN  EMPIRE  103 


IX.     THE  DIVINE  RIGHT  OF  PROPERTY 

1.  Land  Ownership  and  Liberty 

The  owners  of  American  wealth  have  been  molded  grad- 
ually into  a  ruling  class.  Years  of  brutal,  competitive, 
economic  struggle  solidified  their  ranks, — distinguishing 
friend  from  enemy;  clarifying  economic  laws,  and  demon- 
strating the  importance  of  coordination  in  economic  af- 
fairs. Economic  control,  once  firmly  established,  opened 
before  the  wealth  owning  class  an  opportunity  to  dominate 
the  entire  field  of  public  life. 

Before  the  property  owners  could  feel  secure  in  their 
possessions,  steps  must  be  taken  to  transmute  the  popular 
ideas  regarding  "property  rights"  into  a  public  opinion 
that  would  permit  the  concentration  of  important  property 
in  the  hands  of  a  small  owning  class,  at  the  same  time  that 
it  held  to  the  conviction  that  society,  without  privately 
owned  land  and  machinery,  was  unthinkable. 

Many  of  the  leading  spirits  among  the  colonists  had  come 
to  America  in  the  hope  of  realizing  the  ideal  of  "Every 
man  a  farm,  and  every  farm  a  man."  Upon  this  prin- 
ciple they  believed  that  it  would  be  possible  to  set  up  the 
free  government  which  so  many  were  seeking  in  those 
dark  days  of  the  divine  right  of  kings. 

For  many  years  after  the  organization  of  the  Federal 
Government  men  spoke  of  the  public  domain  as  if  it  were 
to  last  indefinitely.  As  late  as  1832  Henry  Clay,  in  a 
discussion  of  the  public  lands,  could  say,  "We  should  re- 
joice that  this  bountiful  resource  possessed  by  our  coun- 
try, remains  in  almost  undiminished  quantity,"  Later  in 
the  same  speech  he  referred  to  the  public  lands  as  being 
"liberally  offered, — in  exhaustless  quantities,  and  at  mod- 


104  THE  AMERICAN  EMPIRE 

erate   prices,    enriching   individuals   and   tending   to   the 
rapid  improvement  of  the  country. ' '  ^ 

The  land  rose  in  price  as  settlers  came  in  greater  num- 
bers. Land  booms  developed.  Speculation  was  rife.  Ef- 
forts were  made  to  secure  additional  concessions  from  the 
Government.  It  was  in  this  debate,  where  the  public  land 
was  referred  to  as  "refuse  land"  that  Henry  Clay  felt 
called  upon  to  remind  his  fellow-legislators  of  the  sig- 
nificance and  growing  value  of  the  public  land.  He  said, 
"A  friend  of  mine  in  this  city  bought  in  Illinois  last  fall 
about  two  thousand  acres  of  this  refuse  land  at  the  mini- 
mum price,  for  which  he  has  lately  refused  six  dollars  per 
acre.  ...  It  is  a  business,  a  very  profitable  business,  at 
which  fortunes  are  made  in  the  new  states,  to  purchase 
these  refuse  lands  and  without  improving  them  to  sell 
them  at  large  advances. ' '  ^ 

A  century  ago,  while  it  was  still  almost  a  wilderness, 
Illinois  began  to  feel  the  pressure  of  limited  resources — a 
pressure  which  has  increased  to  such  a  point  that  it  has 
completely  revolutionized  the  system  of  society  that  was 
known  to  the  men  who  established  the  Government  of  the 
United  States. 

This  early  record  of  a  mid-western  land  boom,  with 
Illinois  land  at  six  dollars  an  acre,  tells  the  story  of  every- 
thing that  was  to  follow.  Even  in  1832  there  was  not 
enough  of  the  good  land  to  go  around.  Already  the  com- 
munity was  dividing  itself  into  two  classes — those  who 
could  get  good  land  and  those  who  could  not.  A  wise  man, 
understanding  the  part  played  by  economic  forces  in  de- 
termining the  fate  of  a  people,  might  have  said  to  Henry 
Clay  on  that  June  day  in  1832,  "Friend,  you  have  pro- 
nounced the  obituary  of  American  liberty." 

Some  wise  man  might  have  spoken  thus,  but  how  strange 
the  utterance  would  have  sounded!     There  was  so  much 


1  Speech  in  the  Senate,  June  20,  1832.     Works  Colvin  Colton,  ed. 
New  York,  Putnam's,  1904,  vol.  7,  p.  503. 

2  Ibid.,  p.  503. 


THE  AMERICAN  EMPIRE  105 


land,  and  all  history  seemed  to  guarantee  the  beneficial  re- 
sults that  are  derived  from  individual  land  ownership. 
The  democracies  of  Greece  and  Rome  were  built  upon  such 
a  foundation.  The  yeomanry  of  England  had  proved  her 
pride  and  stay.  In  Europe  the  free  workers  in  the  towns 
had  been  the  guardians  of  the  rights  of  the  people. 
Throughout  historic  times,  liberty  has  taken  root  where 
there  is  an  economic  foundation  for  the  freedom  which 
each  man  feels  he  has  a  right  to  demand. 


2.  Security  of  ''Acquisitions" 

Feudal  Europe  depended  for  its  living  upon  agricul- 
ture. The  Feudal  System  had  concentrated  the  ownership 
of  practically  all  of  the  valuable  agricultural  land  in  the 
hands  of  the  small  group  of  persons  which  ruled  because 
it  controlled  economic  opportunity.  The  power  of  this 
class  rested  on  its  ownership  of  the  resource  upon  which 
the  majority  of  the  people  depended  for  a  livelihood. 

The  Feudal  System  was  transplanted  to  England,  but 
it  never  took  deep  root  there.  When  in  1215  A.  D.  (only 
a  century  and  a  half  after  the  Great  William  had  made 
his  effort  to  feudalize  England)  King  John  signed  the 
Magna  Carta,  Feudalism  proper  gave  way  to  landlordism — 
the  basis  of  English  economic  life  from  that  time  to  this. 

The  system  of  English  landlordism  (which  showed  itself 
at  its  worst  in  the  absentee  landlordism  of  Ireland)  dif- 
fered from  Feudalism  in  this  essential  respect, — Feudal- 
ism was  based  upon  the  idea  of  the  divine  right  of  kings. 
English  landlordism  was  based  on  the  idea  of  divine  right 
of  property.  English  landlordism  is  the  immediate  an- 
cestor of  the  property  concept  that  is  universally  accepted 
in  the  business  world  of  to-day. 

The  evils  of  Feudalism  and  of  landlordism  were  well 
known  to  the  American  colonists  who  were  under  the  im- 
pression that  they  arose  not  from  the  fact  of  ownership, 
but  from  the  concentration  of  ownership.    The  resources 


lOG  THE  AMERICAN  EMPIRE 


of  the  new  world  seemed  limitless,  and  the  possibility  that 
landlordism  might  show  its  ugly  head  on  this  side  of  the 
Atlantic  was  too  remote  for  serious  consideration. 

With  the  independence  of  the  United  States  assured 
after  the  War  of  1812;  with  the  growth  of  industry,  and 
the  coming  of  tens  of  thousands  of  new  settlers,  the  future 
of  democracy  seemed  bright.  Daniel  Webster  character- 
ized the  outlook  in  1821  by  saying,  "A  country  of  such 
vast  extent,  with  such  varieties  of  soil  and  climate,  with  so 
much  public  spirit  and  private  enterprise,  with  a  popula- 
tion increasing  so  much  bej^ond  former  examples,  ...  so 
free  in  its  institutions,  so  mild  in  its  laws,  so  secure  in  the 
title  it  confers  on  every  man  to  his  own  acquisitions, — needs 
nothing  but  time  and  peace  to  carry  it  forward  to  almost 
any  point  of  advancement. ' '  ' 

"So  free  in  its  institutions,  so  mild  in  its  laws,  so  secure 
in  the  title  it  confers  on  every  man  to  his  own  acquisi- 
tions,"— the  words  were  prophetic.  At  the  moment  when 
they  were  uttered  the  forces  were  busy  that  were  destined 
to  realize  Webster's  dream,  on  an  imperial  scale,  at  the 
expense  of  the  freedom  which  he  prized.  Men  were  free 
to  get  what  they  could,  and  once  having  secured  it,  they 
were  safeguarded  in  its  possession.  Property  ownership 
was  a  virtue  universally  commended.  Constitutions  were 
drawn  and  laws  were  framed  to  guarantee  to  property 
owners  the  rights  to  their  property,  even  in  cases  where 
this  property  consisted  of  the  bodies  of  their  fellow  men. 

The  movement  toward  the  protection  of  property  rights 
has  been  progressive.  Webster  as  a  representative  of  the 
dominant  interests  of  the  country  a  hundred  years  ago  re- 
joiced that  every  man  had  a  secure  title  to  "his  own  ac- 
quisitions," at  a  time  when  the  property  of  the  country 
was  generally  owned  by  those  who  had  expended  som? 
personal  effort  in  acquiring  it.  It  was  a  long  step  from 
these  personal  acquisitions  to  the  tens  of  billions  of  wealth 

s  "Speeches,"  E.  P.  Whipple,  ed.  Little,  Bro\ra  &  Co.,  1910,  pp. 
59-60. 


THE  AMERICAN  EMPIRE  107 


in  the  hands  of  twentieth  century  American  corporations. 
Daniel  Webster  helped  to  bridge  the  gap.  He  was  respon- 
sible, at  least  in  part,  for  the  Dartmouth  College  Decision 
(1816)  in  which  the  Supreme  Court  ruled  that  a  charter, 
granted  by  a  state,  is  a  contract  that  cannot  be  modified 
at  will  by  the  state.  This  decision  made  the  corporation, 
once  created  and  chartered,  a  free  agent.  Then  came  the 
Fourteenth  Amendment  with  its  provision  that  "no 
state  shall  make  or  enforce  any  law  which  shall  abridge 
the  privileges  or  immunities  of  citizens  of  the  United 
States;  nor  shall  any  state  deprive  any  person  of  life, 
liberty  or  property,  without  due  process  of  law."  The 
amendment  was  intended  to  benefit  negroes.  It  has  been 
used  to  place  property  ownership  first  among  the  Ameri- 
can beatitudes. 

Corporations  are  "persons"  in  the  eyes  of  the  law. 
When  the  state  of  California  tried  to  tax  the  property 
of  the  Southern  Pacific  Railroad  at  a  rate  different  from 
that  which  it  imposed  on  persons,  the  Supreme  Court  de- 
clared the  law  unconstitutional.  This  decision,  coupled 
with  that  in  the  Dartmouth  College  Case  secured  for  a 
corporation  "the  same  immunities  as  any  other  person ;  and 
since  the  charter  creating  a  corporation  is  a  contract, 
whose  obligation  cannot  be  impaired  by  the  one-sided  act 
of  a  legislature,  its  constitutional  position,  as  property 
holder,  is  much  stronger  than  anywhere  in  Europe." 
These  decisions  "have  had  the  effect  of  placing  the  mod- 
ern industrial  corporation  in  an  almost  impregnable  con- 
stitutional position. ' '  * 

Surrounded  by  constitutional  guarantees,  armed  with  legal 
privileges  and  prerogatives  and  employing  the  language  of 
liberty,  the  private  property  interests  in  the  United  States 
have  gone  forward  from  victory  to  victory,  extending  their 
power  as  they  increased  and  concentrated  their  possessions. 


*  "The  Constitutional  Position  of  Property  in  America,"  Arthur 
T.  Hadley,  Independent,  April  16,  1908. 


108  THE  AMERICAN  EMPIRE 


3.  Safeguarding  Property  Bights 

The  efforts  of  Daniel  Webster  and  his  contemporaries  to 
protect  "acquisitions"  have  been  seconded,  with  extraor- 
dinary ability,  by  business  organizers,  accountants,  lawyers 
and  bankers,  who  have  broadened  the  field  of  their  en- 
deavors until  it  includes  not  merely  "acquisitions,"  but 
all  "property  rights."  Daniel  Webster  lived  before  the 
era  of  corporations.  He  thought  of  "acquisitions"  as 
property  secured  through  the  personal  efforts  of  the  hu- 
man being  who  possessed  it.  To-day  more  than  half  of 
the  total  property  and  probably  more  than  three-quarters 
of  productive  wealth  is  owned  by  corporations.  It  re- 
quired ability  and  foresight  to  extend  the  right  of  "ac- 
quisitions" to  the  rights  of  corporate  stocks  and  bonds. 
The  leaders  among  the  property  owners  possessed  the 
necessary  qualifications.  They  did  their  work  masterfully, 
and  to-day  corporate  property  rights  are  more  securely 
protected  than  were  the  rights  of  acquisitions  a  hundred 
years  ago. 

The  safeguards  that  have  been  thrown  about  property 
are  simple  and  effective.  They  arose  quite  naturally  out 
of  the  rapidly  developing  structure  of  industrialism. 

First — There  was  an  immense  increase  in  the  amount  of 
property  and  of  surplus  in  the  hands  of  the  wealth-owning 
class.  After  the  new  industry  was  brought  into  being 
with  the  Industrial  Revolution,  economic  life  no  longer 
depended  so  exclusively  upon  agricultural  land.  Coal, 
iron,  copper,  cement,  and  many  other  resources  could  now 
be  utilized,  making  possible  a  wider  field  for  property 
rights.  Again,  the  amount  of  surplus  that  could  be  pro- 
duced by  one  worker,  with  the  assistance  of  a  machine, 
was  much  greater  than  under  the  agricultural  system. 

Second — The  new  method  of  conducting  economic  af- 
fairs gave  the  property  owners  greater  security  of  pos- 
session.    Property  holders  always  have  been  fearful  that 


THE  AMERICAN  EMPIRE  109 


some  fate  might  overtake  their  property,  forcing  them  into 
the  ranks  of  the  non-possessors.  "When  property  was  in 
the  form  of  bullion  or  jewels,  the  danger  of  loss  was  com- 
paratively great.  The  Feudal  aristocracy,  with  its  land- 
holdings,  was  more  secure.  Land-holdings  w^ere  also  more 
satisfactory.  Jewels  and  plate  do  not  pay  any  rent,  but 
tenants  do.  Thus  the  owner  of  land  had  security  plus  a 
regular  income. 

The  corporation  facilitated  possession  by  providing  a 
means  (stocks  and  bonds)  whereby  the  property  owner  was 
under  no  obligation  other  than  that  of  clipping  coupons  or 
cashing  interest  checks  upon  "securities"  that  are  mat- 
ters of  public  record;  issued  by  corporations  that  make 
detailed  financial  reports,  and  that  are  subject  to  vigorous 
public  inspection  and,  in  the  cases  of  banks  and  other  fi- 
nancial organizations,  to  the  most  stringent  regulation. 

Third — Greater  permanence  has  been  secured  for  prop- 
erty advantages.  Corporations  have  perpetual,  uninter- 
rupted life.  The  deaths  of  persons  do  not  affect  them. 
The  corporation  also  overcame  the  danger  of  the  dissipa- 
tion of  property  in  the  process  of  * '  three  generations  from 
shirt  sleeves  to  shirt  sleeves."  The  worthless  son  of  the 
thrifty  parent  may  still  be  able  to  squander  his  inheritance, 
but  that  simply  means  a  transfer  of  the  title  to  his  stocks 
and  bonds.     The  property  itself  remains  intact. 

Fourth — Property  has  secured  a  claim  on  income  that 
is,  in  the  last  analysis,  prior  to  the  claim  of  the  worker. 

When  a  man  ran  his  own  business,  investing  his  capital, 
putting  back  part  of  his  earnings,  and  taking  from  the 
business  only  what  he  needed  for  his  personal  expenses, 
"profits"  were  a  matter  of  good  fortune.  There  were 
"good  years"  and  "bad  years,"  when  profits  were  high 
or  low.  Many  years  closed  with  no  profit  at  all.  The 
average  farmer  still  handles  his  business  in  that  way. 

The  incorporation  of  business,  and  the  issuing  of  bonds 
and  stocks  has  revolutionized  this  situation.  It  is  no  longer 
possible  to  "wait  till  things  pick  up."     If  the  business  has 


110  THE  AMERICAN  EMPIRE 

issued  a  million  in  bonds,  at  five  per  cent,  there  is  an  inter- 
est charg^e  of  $50,000  that  must  be  met  each  year.  There 
may  be  no  money  to  lay  out  for  repairs  and  needed  im- 
provements, but  if  the  business  is  to  remain  solvent,  it  must 
pay  the  interest  on  its  bonds. 

Businesses  that  are  issuing  securities  to  the  public  face 
the  same  situation  with  regard  to  their  stocks.  Wise  direc- 
tors see  to  it  that  a  regular  rate,  rather  than  a  high  rate 
of  dividends,  is  paid.  Regularity  means  greater  certainty 
and  stability,  hence  better  consideration  from  the  invest- 
ing public. 

Fifth — The  practices  of  the  modern  economic  world  have 
gone  far  to  increase  the  security  of  property  rights. 

Business  men  have  worked  ardently  to  "stabilize"  busi- 
ness. They  have  insisted  upon  the  importance  of  "busi- 
ness sanity ; "  of  conservatism  in  finance ;  of  the  returns 
due  a  man  who  risks  his  wealth  in  a  business  venture ;  and 
of  the  fundamental  necessity  of  maintaining  business  on  a 
sound  basis.  After  centuries  of  experiment  they  have 
evolved  what  they  regard  as  a  safe  and  sane  method  of 
financial  business  procedure.  Every  successful  business 
man  tried  to  live  up  to  the  following  well-established 
formula. 

First,  he  pays  out  of  his  total  returns,  or  gross  receipts, 
the  ordinary  costs  of  doing  business — materials,  labor,  re- 
pairs and  the  like.  These  payments  are  known  as  running 
expenses  or  up-keep. 

Second,  after  up-keep  charges  are  paid  he  takes  the  re- 
mainder, called  gross  income,  and  pays  out  of  it  the  fixed 
charges — taxes,  insurance,  interest  and  depreciation. 

Third,  the  business  man,  having  paid  all  of  the  neces- 
sary expenses  of  doing  business  (the  running  expenses  and 
the  fixed  charges),  has  left  a  fund  (net  income)  which, 
roughly  speaking,  is  the  profits  of  the  business.  Out  of 
this  net  income,  dividends  are  paid,  improvements  and 
extensions  of  the  plant  are  provided  for. 


THE  AMERICAN  EMPIRE  111 


.  Fourth,  the  careful  business  man  increases  the  stability 
of  his  business  by  adding  something  to  his  surplus  or  un- 
divided profits. 

The  operating  statistics  of  the  United  Steel  Corporation 
for  1918  illustrate  the  principle : 

1.  Gross  Receipts $1,744,312,163 

Manufacturing   and    Operating   expenses 

including  ordinary  repairs 1,178,032,665 

2.  Gross  Earnings    $    566,279,498 

Other  income 40,474,823 

$  606,754,321 
General  Expense,   (including  commission 

and  selling  expense,  taxes,  etc.) 337,077,986 

Interest,  depreciation,  sinking  fund,  etc.  144,358,958 

3.  Net  Income $    125,317,377 

Dividends    96,382,027 

4.  Surplus  for  the  year $     28,935,350 

Total  surplus 460,596,154 

Like  every  carefully  handled  business,  the  Steel  Corpora- 
tion,— 

1.  Paid  its  running  expenses, 

2.  Paid  its  fixed  obligations, 

3.  Divided  up  its  profits, 

4.  And  kept  a  nest  egg. 

The  effectiveness  of  such  means  of  stabilizing  property 
income  is  illustrated  by  a  compilation  (published  in  the 
Wall  Street  Journal  for  August  7th,  1919)  of  the  business 
of  104  American  corporations  between  December  31,  1914, 
and  December  31,  1918.  The  inventories — value  of  prop- 
erty owned — had  increased  from  1,192  millions  to  2,624  mil- 
lions of  dollars ;  the  gain  in  surplus,  during  the  four  years, 


112  THE  AMERICAN  EMPIRE 

was  1,941  millions;  the  increase  in  ''working  capital"  was 
1,876  millions.  These  corporations,  representing  only  a 
small  fraction  of  the  total  business  of  the  country,  had 
added  billions  to  their  property  values  during  the  four 
years. 

These  various  items, — up-keep;  depreciation;  insurance; 
taxes;  interest;  dividends  and  surplus, — are  recognized 
universally  by  legislatures  and  courts  as  "legitimate"  out- 
lays. They,  therefore,  are  elements  that  are  always  present 
in  the  computation  of  a  "fair"  price.  The  cost  to  the  con- 
sumer of  coffee,  shoes,  meat,  blankets,  coal  and  transpor- 
tation are  all  figured  on  such  a  basis.  Hence,  it  will  be  seen 
that  each  time  the  consumer  buys  a  pair  of  shoes  or  a  pound 
of  meat,  he  is  paying,  with  part  of  his  money,  for  the 
stabilizing  of  property. 

Fifth.  Property  titles  under  this  system  are  rendered 
immortal.  A  thousand  dollars,  invested  in  1880  in  5  per 
cent.  40  year  bonds,  will  pay  to  the  owner  $2,000  in  interest 
by  1920,  at  which  time  the  owner  gets  his  original  thousand 
back  again  to  be  re-invested  so  long  as  he  and  his  descend- 
ants care  to  do  so.  The  dollar,  invested  in  the  business  of 
the  steel  corporation,  by  the  technical  processes  of  book- 
keeping, is  constantly  renewed.  Not  only  does  it  pay  a  re- 
turn to  the  owner,  but  literally,  it  never  dies. 

The  community  is  built  upon  labor.  Its  processes  are 
continued  and  its  wealth  is  re-created  by  labor.  The  men 
who  work  on  the  railroad  keep  the  road  operating ;  those 
who  own  the  railroad  owe  to  it  no  personal  fealty,  and  per- 
form upon  it  no  personal  service.  If  the  worker  dies,  the 
train  must  stop  until  he  is  replaced;  if  the  owner  dies, 
the  clerk  records  a  change  of  name  in  the  registry  books. 

The  well-ordered  society  will  encourage  work.  It  will 
aim  to  develop  enthusiasm,  to  stimulate  activity.  Never- 
theless, in  "practical  America"  a  scheme  of  economic  or- 
ganization is  being  perfected  under  which  the  cream  of 
life  goes  to  the  owners.  They  have  the  amplest  opportuni- 
ties.    They  enjoy  the  fii'st  fruits. 


THE  AMERICAN  EMPIRE  113 


4.  Property  Bights  and  Civilization 

Under  these  circumstances,  it  is  easy  to  see  how  "the 
rights  of  property"  soon  comes  to  mean* the  same  thing 
as  "civilization,"  and  how  "the  preservation  of  law  and 
order"  is  always  interpreted  as  the  protection  of  property. 
With  a  community  organized  on  a  basis  which  renders 
property  rights  supreme  in  all  essential  particulars,  it  is 
but  natural  that  the  perpetuation  of  these  rights  should 
be  regarded  as  the  perpetuation  of  civilization  itself. 

The  present  organization  of  economic  life  in  the  United 
States  permits  the  wealth  owners  through  their  ownership 
to  live  without  doing  any  work  upon  the  work  done  by  their 
fellows.  As  recipients  of  property  income  (rent,  interest 
and  dividends)  they  have  a  return  for  which  they  need 
perform  no  service, — a  return  that  allows  them  to  "live 
on  their  income. ' ' 

The  man  who  fails  to  assist  in  productive  activity  gives 
nothing  of  himself  in  return  for  the  food,  clothing  and 
shelter  which  he  enjoys, — that  is,  he  lives  on  the  labor  of 
others.  Where  some  have  sowed  and  reaped,  hammered 
and  drilled,  he  has  regaled  himself  on  the  fruits  of  their 
toil,  while  never  toiling  himself. 

The  matter  appears  most  clearly  in  the  case  of  an  heir 
to  an  estate.  The  father  dies,  leaving  his  son  the  title 
deeds  to  a  piece  of  city  land.  If  he  has  no  confidence  in 
his  son's  business  ability  or  if  his  son  is  a  minor,  he  may 
leave  the  land  in  trust,  and  have  it  administered  in  his 
son's  interest  by  some  well  organized  trust  company.  The 
father  did  not  make  the  land,  though  he  did  buy  it.  The 
son  neither  made  nor  bought  the  land,  it  merely  came  to 
him;  and  yet  each  year  he  receives  a  rent-payment  upon 
which  he  is  able  to  live  comfortably  without  doing  any 
work.  It  must  at  once  be  apparent  that  this  son  of  his 
father,  economically  speaking,  performs  no  function  in  the 
community,  but  merely  takes  from  the  community  an  an- 
nual toll  or  rental  based  on  hj§  Q\ynership  of  a  part  of  the 


114  THE  AMERICAN  EMPIRE 


land  upon  which  his  fellowmen  depend  for  a.  living.  Of 
what  will  this  toll  consist?  Of  bread,  shoes,  motor-cais, 
cigars,  books  and  pictures, — the  products  of  the  labor  of 
other  men. 

This  son  of  his  father  is  living  on  his  income, — ^supported 
by  the  labor  of  other  people.  He  performs  no  labor  him- 
self, and  yet  he  is  able  to  exist  comfortably  in  a  world 
where  all  of  the  things  which  are  consumed  are  the  direct 
or  indirect  product  of  the  labor  of  some  human  being. 

Living  on  one's  income  is  not  a  new  social  experience, 
but  it  is  relatively  new  in  the  United  States.  The  practice 
found  a  reasonably  effective  expression  in  the  feudalism 
of  medieval  Europe.  It  has  been  brought  to  extraordi- 
nary perfection  under  the  industrialism  of  Twentieth  Cen- 
tury America. 

Imagine  the  feelings  of  the  early  inhabitants  of  the  Amer- 
ican colonies  toward  those  few  gentlemen  who  set  them- 
selves up  as  economically  superior  beings,  and  who  insisted 
upon  living  without  any  labor,  upon  the  labor  performed 
by  their  fellows.  It  was  against  the  suggestion  of  such  a 
practice  that  Captain  John  Smith  vociferated  his  famous 
**He  that  will  not  work,  neither  shall  he  eat."  The  sug- 
gestion that  some  should  share  in  the  proceeds  of  community 
life  without  participating  in  the  hardships  that  were  in- 
volved in  making  a  living  seemed  preposterous  in  those 
early  days. 

To-day,  living  on  one's  income  is  accepted  in  every  in- 
dustrial center  of  the  United  States  as  one  of  the  methods 
of  gaining  a  livelihood.  Some  men  and  women  work  for 
a  living.     Other  men  and  women  own  for  a  living. 

Workers  are  in  most  cases  the  humble  people  of  the  com- 
munity. They  do  not  live  in  the  finest  homes,  eat  the  best 
food,  wear  the  most  elaborate  clothing,  or  read,  travel  and 
enjoy  the  most  of  life. 

The  owners  as  a  rule  are  the  well-to-do  part  of  the  com- 
munity.    They  derive  much  of  all  of  their  income  from 


THE  AMERICAN  EMPIRE  115 


investments.  The  return  which  they  make  to  the  commu- 
nity in  services  is  small  when  compared  with  the  income 
which  they  receive  from  their  property  holdings. 

Living  on  one's  income  is  becoming  as  much  a  part  of 
American  economic  life  as  living  by  factory  labor,  or  by 
mining,  or  by  manufacturing,  or  by  any  other  occupation 
upon  which  the  community  depends  for  its  products.  The 
difference  between  these  occupations  and  living  on  one's 
income  is  that  they  are  relatively  menial,  and  it  is  rela- 
tively respectable,  that  is,  they  have  won  the  disapprobation 
and  it  has  won  the  approbation  of  American  public  opinion. 

The  best  general  picture  of  the  economic  situation  that 
permits  a  few  people  to  live  on  their  incomes,  while  the 
masses  of  the  people  work  for  a  living,  is  contained  in  the 
reports  of  the  Federal  Commissioner  of  Internal  Revenue. 
The  figures  for  1917  ("Statistics  of  Income  for  1917"  pub- 
lished August  1919)  show  that  3,472,890  persons  filed  re- 
turns, making  one  for  each  six  families  in  the  United  States, 
Almost  one  half  of  the  total  number  of  returns  made  in  1917 
were  from  persons  whose  income  was  between  $1000  and 
$2000.  There  were  1,832,132  returns  showing  incomes  of 
$2000  or  more,  one  for  each  twelve  families  in  the  country. 

The  number  of  persons  receiving  the  higher  incomes  is 
comparatively  small.  There  were  270,666  incomes  between 
$5,000  and  $10,000;  30,391  between  $10,000  and  $25,000; 
12,439  between  $25,00  and  $50,000.  There  were  432,662  re- 
turns (22  for  each  1000  families  in  the  United  States)  show- 
ing incomes  of  $5,000  or  over;  there  were  161,996  returns 
(8  returns  for  each  1000  families)  showing  incomes  of  $10,- 
000  or  over;  49,494  showing  incomes  of  $25,000  and  over; 
19,103  showing  incomes  of  $50,000  and  more.  Thus  the 
number  of  moderate  and  large  incomes,  compared  with  the 
total  population  of  the  country,  was  minute. 

The  portion  of  the  report  that  is  of  particular  interest, 
in  so  far  as  the  present  study  is  concerned,  is  that  which 
presents  a  division  of  the  total  net  income  of  those  report- 
ing $2,000  or  more,  into  three  classes — income  from  per- 


116  THE  AMERICAN  EMPIRE 


soual  service,   income   from   business   profits   and   income 
from  the  ownership  of  property. 

Personal  Incomes  by  Sources — 1917 

Amount  of      Per  Cent 

Income  of  Total 

Source  Income 

1.  Income  from  personal  serv- 

ice; salaries,  wages;  com- 
mission, bonuses,  director 's 
fees,  etc $  3,648,437,902  30.21 

2.  Income  from  business;  busi- 

ness, trade,  commerce, 
partnership,  farming,  and 
profits  from  sales  of  real 
estate,  stocks,  bonds,  and 
other  property 3,958,670,028  32.77 

3.  Income  from  property;  rents 

and  royalties ,  684,343,399  5.67 

Interest  on  bonds,  notes,  etc.  936,715,456  7.76 

Dividends 2,848,842,499  23.59 

Total  from  Property. . . 4,469,901,354  37.02 

4^  Total  income 12,077,009,284  100.00 

Those  persons  who  have  incomes  of  .$2,000  or  more  receive 
30  cents  on  the  dollar  in  the  form  of  wages  and  salaries; 
33  cents  in  the  form  of  business  profits,  and  37  cents  in  the 
form  of  incomes  from  the  ownership  of  property.  The  div- 
idend payments  alone — to  this  group  of  property  owners, 
are  equal  to  three  quarters«of  the  total  returns  for  personal 
service. 

These  figures  refer,  of  course,  to  all  those  in  receipt  of 
$2,000  or  more  per  year.  Obviously,  the  smaller  incomes 
are  in  the  form  of  wages,  salaries,  and  business  profits, 
while  the  larger  incomes  take  the  form  of  rent,  interest  and 
dividends.  This  is  made  apparent  by  a  study  of  the  de- 
tailed tables  published  in  connection  with  the  ** Income 
Statistics  for  1916." 


THE  AMERICAN  EMPIRE  117 


Among  those  of  small  incomes — $5,000  to  $10,000 — nearly- 
half  of  the  income  was  derived  from  personal  services. 
The  proportion  of  the  income  resulting  from  personal  serv- 
ice diminished  steadily  as  the  incomes  rose  until,  in  the 
highest  income  group — those  receiving  $2,000,000  or  more 
per  year,  less  than  one-half  of  one  per  cent,  was  the  result 
of  personal  service  while  more  than  99  per  cent,  of  the  in- 
comes came  from  property  o^vnership. 

A  small  portion  of  the  American  people  are  in  receipt 
of  incomes  that  necessitate  a  report  to  the  revenue  officers. 
Among  those  persons,  a  small  number  are  in  receipt  of  in- 
comes that  might  be  termed  large — incomes  of  $10,000 
or  over,  for  example.  Among  these  persons  with  large  in- 
comes the  majority  of  the  income  is  secured  in  the  form 
of  rent,  interest,  dividends  and  profits.  The  higher  the 
income  group,  the  larger  is  the  percentage  of  the  income 
that  comes  from  property  holdings. 

The  economic  system  that  exists  at  the  present  time  in  the 
United  States  places  a  premium  on  property  ownership. 
The  recipients  of  the  large  incomes  are  the  holders  of  the 
large  amounts  of  property. 

Large  incomes  are  property  incomes.  The  rich  are  ricli 
because  they  are  property  owners.  Furthermore,  the  or- 
ganization of  present-day  business  makes  the  owner  of 
property  more  secure — far  more  secure  in  his  income,  than 
is  the  worker  who  produces  the  wealth  out  of  which  the 
property  income  is  paid. 

5.  Plutocracy 

The  owning  class  in  the  United  States  is  established  on 
an  economic  basis, — the  private  ownership  of  the  earth.  No 
more  solid  foundation  for  class  integrity  and  class  power 
has  ever  been  discovered. 

The  owners  of  the  United  States  are  powerfully  en- 
trenched. Operating  through  the  corporation,  its  members 
have  secured  possession  of  the  bulk  of  the  more  useful 


118  THE  AMERICAN  EMPIRE 


resources,  the  important  franchises  and  the  prodnctive  cap- 
ital. Where  they  do  not  own  outright,  they  control.  The 
earth,  in  America,  is  the  landlords  and  the  fullness  thereof. 
They  own  the  productive  machinery,  and  because  they  own 
they  are  able  to  secure  a  vast  annual  income  in  return  for 
their  bare  ownership. 

Families  which  enjoy  property  income  have  one  great 
common  interest — that  of  perpetuating  and  continuing  the 
property  income;  hence  the  "cohesion  of  wealth."  "The 
cohesion  of  wealth"  is  a  force  that  welds  individuals  and 
families  who  receive  property  income  into  a  unified  group 
or  class. 

The  cohesion  of  wealth  is  a  force  of  peculiar  social  signif- 
icance. It  might  perhaps  be  referred  to  as  the  class  con- 
sciousness of  the  wealthy  except  that  it  manifests  itself 
among  people  who  have  recently  acquired  wealth,  more 
violently,  in  some  cases,  than  it  appears  among  those  whose 
families  have  possessed  wealth  for  generations.  Then,  the 
cohesion  of  wealth  is  not  always  an  intelligent  force.  In 
the  case  of  some  persons  it  is  largely  instinctive. 

Originally,  the  cohesion  of  wealth  expresses  itself  instinc- 
tively among  a  group  of  wealth  owners.  They  may  be 
competing  fiercely  as  in  the  case  of  a  group  of  local  banks, 
department  stores,  or  landlords,  but  let  a  common  enemy 
appear,  with  a  proposition  for  currency  reform,  labor  legis- 
lation or  land  taxation  and  in  a  twinkling  the  conflicting 
interests  are  thrown  to  the  winds  and  the  property  owners 
are  welded  into  a  coherent,  unified  group.  This  is  the 
beginning  of  a  wealth  cohesion  which  develops  rapidly 
into  a  wealth  consciousness. 

American  business,  a  generation  ago,  was  highly  com- 
petitive. Each  business  man 's  hand  was  raised  against  his 
neighbor  and  the  downfall  of  one  was  a  matter  of  rejoicing 
for  all.  The  bitter  experience  of  the  nineties  drove  home 
some  lessons ;  the  struggles  with  labor  brought  some  more ; 
the  efforts  at  government  regulations  had  their  effect;  but 
most  of  all,  the  experience  of  meeting  v/ith  men  in  various 


THE  AMERICAN  EMPIRE  119 

lines  of  business  and  discussing  the  common  problems 
through  the  city,  state  and  national  and  business  organi- 
zations led  to  a  realization  of  the  fact  that  those  who  owned 
and  managed  business  had  more  in  common  than  they  had 
in  antagonism.  By  knifing  one  another  they  made  them- 
selves an  easy  prey  for  the  unions  and  the  government. 
By  pooling  ideas  and  interests  they  presented  a  solid  front 
to  the  demands  of  organized  labor  and  the  efforts  of  the 
public  to  enforce  regulation 

"Plutocracy"  means  control  by  those  who  own  wealth. 
The  "plutocratic  class"  consists  of  that  group  of  persons 
who  control  community  affairs  because  they  own  property. 
This  class,  because  of  its  property  ownership,  is  compelled 
to  devote  time  and  infinite  pains  to  the  task  of  safeguard- 
ing the  sacred  rights  of  property.  It  is  to  that  task  that 
the  leaders  of  the  American  plutocracy  have  committed 
themselves,  and  it  is  from  the  results  of  that  accomplished 
work  that  they  are  turning  to  new  labors. 


120  THE  AMERICAN  EMPIRE 


X.    INDUSTRIAL  EMPIRES 
1.  They  Cannot  Pause! 

The  foundations  of  Empire  have  been  laid  in  the  United 
States.  Territory  has  been  conquered;  peoples  have  been 
subjug^ated  or  annihilated ;  an  imperial  class  has  established 
itself.  Here  are  all  of  the  essential  characteristics  of 
empire. 

The  American  people  have  been  busy  laying  the  politi- 
cal foundations  of  Empire  for  three  centuries.  A  great 
domain,  taken  by  force  of  arms  from  the  people  who  were 
in  possession  of  it  has  been  either  incorporated  into  the 
Union,  or  else  held  as  dependent  territory.  The  aborigines 
have  disappeared  as  a  race.  The  Negroes,  kidnaped  from 
their  native  land,  enslaved  and  later  liberated,  are  still 
treated  as  an  inferior  people  who  should  be  the  hewers 
of  wood  and  the  drawers  of  water.  A  vast  territory  was 
taken  from  Mexico  as  a  result  of  one  war.  A  quarter  mil- 
lion square  miles  were  secured  from  Spain  in  another;  on 
the  Continent  three  and  a  half  millions  of  square  miles;  in 
territorial  possessions  nearly  a  quarter  of  a  million  more — 
this  is  the  result  of  little  more  than  two  hundred  years  of 
struggle;  this  is  the  geographic  basis  for  the  American 
Empire. 

The  structure  of  owning  class  power  is  practically  com- 
plete in  the  United  States.  Through  long  yeai's  the  busi- 
ness interests  have  evolved  a  form  of  organization  that  con- 
centrates the  essential  power  over  the  industrial  and  fi- 
nancial processes  in  a  very  few  hands, — the  hands  of  the  in- 
vestment bankers.  During  this  contest  for  power  the  plu- 
tocracy learned  the  value  of  the  control  of  public  opinion, 
and  brought  the  whole  machinery  for  the  direction  of  pub- 
lic affairs  under  its  domination.  Thus  political  and  social 
institutions  as  well  as  the  processes  of  economic  life  were 


THE  AMERICAN  EMPIRE  121 


made  subject  to  plutocratic  authority.  A  hundred  years 
has  sufficed  to  promulgate  ideas  of  the  sacredness  of  pri- 
vate property  that  place  its  preservation  and  protection 
among  the  chief  duties  of  man.  Economic  organization; 
the  control  of  all  important  branches  of  public  affairs,  and 
the  elevation  of  property  rights  to  a  place  among  the  beati- 
tudes— by  these  three  means  was  the  authority  of  the  plu- 
tocracy established  and  safeguarded. 

Since  economic  political  and  social  power  cover  the  field 
of  authority  that  one  human  being  may  exercise  over  an- 
other, it  might  be  supposed  that  the  members  of  the  pluto- 
cratic class  would  pause  at  this  point  and  cease  their  efforts 
to  increase  power.  But  the  owners  cannot  pause !  A  force 
greater  than  their  wills  compels  them  to  go  on  at  an  ever 
growing  speed.  Within  the  vitals  of  the  economic  system 
upon  which  it  subsists  the  plutocracy  has  found  a  source 
of  never-ending  torment  in  the  form  of  a  constantly  in- 
creasing surplus. 


2.  The  Knotty  Problem  of  Surplus 

The  present  system  of  industry  is  so  organized  that  the 
worker  is  always  paid  less  in  wages  than  he  creates  in  prod- 
uct. A  part  of  this  difference  between  product  and  wages 
goes  to  the  upkeep  and  expansion  of  the  industry  in  which 
the  worker  is  employed.  Another  part  in  the  form  of  in- 
terest, dividends,  rents,  royalties  and  profits,  goes  to  the 
owners  of  the  land  and  productive  machinery. 

The  values  produced  in  industry  and  handed  to  the  in- 
dustrial worker  or  property  owner  in  the  form  of  income, 
may  be  used  or  "spent"  either  for  "consumption  goods" — 
things  that  are  to  be  used  in  satisfying  human  wants, 
such  as  street  car  transportation,  clothing,  school  books, 
and  smoking  tobacco ;  or  for  production  goods — things  that 
are  to  be  used  in  the  making  of  wealth,  such  as  factory 
buildings,  lathes,  harvesting  machinery,  railroad  equipment. 
Those  who  have  small  incomes  necessarily  spend  the  greater 


122  THE  AMERICAN  EMPIRE 


part  for*  the  consumption  of  goods  upon  which  their  exis- 
tence depends.  On  the  other  hand,  those  who  are  in  receipt 
of  large  incomes  cannot  use  more  than  a  limited  amount  of 
consumption  goods.  Therefore,  they  are  in  a  position  to 
turn  part  of  their  surplus  into  production  goods.  As  a 
reward  for  this  ''saving"  the  system  gives  them  title  to  an 
amount  of  wealth  equal  to  the  amount  saved,  and  in  addi- 
tion, it  grants  an  amount  of  "interest"  so  that  the  next 
year  the  recipient  of  surplus  gets  the  regular  share  of  sur- 
plus, and  beside  that  an  additional  reward  in  the  form  of 
interest.  His  share  of  the  surplus  is  thus  increased.  That 
is,  surplus  breeds  surplus. 

The  workers  are,  for  the  most  part,  spenders.  The  great 
bulk  of  their  income  is  turned  at  once  into  consumption 
goods.  The  owners  in  many  instances  are  capitalists  who 
hold  property  for  the  purpose  of  turning  the  income  de- 
rived from  it  into  additional  investments. 

Could  the  worker  buy  back  dollar  for  dollar  the  values 
v/hich  he  produces  there  would  be  no  surplus  in  the  form  of 
rent,  interest,  dividends  and  profits.  The  present  economic 
system  is,  however,  built  upon  the  principle  that  those  who 
own  the  lands  and  the  productive  machinery  should  be  rec- 
ompensed for  their  mere  ownership.  It  follows,  of  course, 
that  the  more  land  and  machinery  there  is  to  own  the 
greater  will  be  the  amount  of  surplus  which  will  go  to  the 
owners.  Since  surplus  breeds  surplus  the  owners  find  that 
it  pays  them  not  to  use  all  of  their  income  in  the  form  of 
consumption,  but  rather  to  invest  all  that  they  can,  thereby 
increasing  the  share  of  surplus  that  is  due  them.  The 
worker,  on  the  other  hand,  finds  that  he  must  produce  a 
constantly  larger  amount  of  wealth  which  he  never  gets, 
but  which  is  destined  for  the  payment  of  rent,  interest, 
dividends  and  profits.  Increased  incomes  yield  increased 
investments.  Increased  investments  necessitate  the  creation 
and  payment  of  increased  surplus.  The  payment  of  in- 
creased surplus  means  increased  incomes.  Thus  the  circle 
is  continued — with  the  returns  heaping  up  in  the  coffers  of 
the  plutocracy. 


THE  AMERICAN  EMPIRE  123 


Originally  the  surplus  was  utilized  to  free  the  members 
of  the  owning  class  from  the  grinding  drudgery  of  daily 
toil,  by  permitting  them  to  enjoy  the  fruits  of  the  labor  of 
others.  Then  it  was  employed  in  the  exercise  of  power  over 
the  enconomic  and  social  machinery.  But  that  was  not 
the  end — instead  it  proved  only  the  beginning.  As 
property  titles  were  concentrated  in  fewer  and  fewer  hands, 
and  the  amount  of  property  owned  by  single  individuals  or 
groups  of  individuals  becomes  greater,  their  incomes 
(chiefly  in  the  form  of  rent,  interest,  dividends  and  profits) 
rose  until  by  1917  there  were  19,103  persons  in  the  United 
States  who  declared  incomes  of  $50,000  or  more  per  year, 
which  is  the  equivalent  of  $1,000  per  week.  Among  these 
persons  141  declared  annual  incomes  of  over  $1,000,000. 
Besides  these  personal  incomes,  each  industry  which  paid 
these  dividends  and  profits,  through  its  depreciation,  amorti- 
zation, replacement,  new  construction,  and  surplus  funds 
was  reinvesting  in  the  industries  billions  of  wealth  that 
would  be  used  in  the  creation  of  more  wealth.  The  normal 
processes  of  the  growth  of  the  modern  economic  system  has 
forced  upon  the  masters  of  life  the  problem  of  disposing 
of  an  ever  increasing  amount  of  surplus. 

During  prosperous  periods,  the  investment  funds  of  a 
community  like  England  and  the  United  States  grow  very 
rapidly.  The  more  prosperous  the  nation,  the  greater  is  the 
demand  from  those  who  cannot  spend  their  huge  incomes 
for  safe,  paying  investment  opportunities. 

The  immense  productivity  of  the  present-day  system 
of  industry  has  added  greatly  to  the  amount  of  surplus 
seeking  investment.  Each  invention,  each  labor  saving 
device,  each  substitution  of  mechanical  power  that  multi- 
plies the  productive  capacity  of  industry  at  the  same  time 
increases  the  surplus  at  the  disposal  of  the  plutocracy. 

The  surplus  must  be  disposed  of.  There  is  no  other 
alternative.  If  hats,  flour  and  gasoline  are  pilled  up  in  the 
warehouses  or  stored  in  tanks,  no  more  of  these  commodities 
will  be  made  until  this  surplus  has  been  used.  The  whole 
economic  system  proceeds  on  the  principle  that  for  each 


1^4  THE  AMERICAN  EMPIRE 


commodity  produced,  a  purchaser  must  be  found  before 
another  unit  of  the  commodity  is  ordered.  Demand  for 
commodities  stimulates  and  regulates  the  machinery  of 
production. 

Those  in  control  of  the  modern  economic  system  have  no 
choice  but  to  produce  surplus,  and  once  having  produced  it, 
they  have  no  choice  except  to  dispose  of  it.  An  inexorable 
fate  drives  them  onward — augmenting  their  burdens  as  it 
multiplies  their  labors. 

Investment  opportunities,  of  necessity,  are  eagerly  sought 
by  the  plutocracy,  since  the  law  of  their  system  is  "Invest 
or  perish ' '  ! 

Invest?  Where?  Where  there  is  some  demand  for 
surplus  capital — that  is  in  '  *  undeveloped  countries. ' ' 

The  necessity  for  disposing  of  surplus  has  imposed  upon 
the  business  men  of  the  world  a  classification  of  all  countries 
as  "developed"  or  "undeveloped."  "Developed"  coun- 
tries are  those  in  which  the  capitalist  processes  have  gone  far 
enough  to  produce  a  surplus  that  is  sufficient  to  provide 
for  the  upkeep  and  for  the  normal  expansion  of  industry. 
In  "developed"  countries  mines  are  opened,  factories  are 
built,  railroads  are  financed,  as  rapidly  as  needed,  out  of 
the  domestic  industrial  surplus.  ' '  Undeveloped ' '  countries 
are  those  which  cannot  produce  sufficient  capital  for  their 
own  needs,  and  which  must,  therefore,  depend  for  industrial 
expansion  upon  investments  of  capital  from  the  countries 
that  do  produce  a  surplus. 

"Developed"  countries  are  those  in  which  the  modem 
industrial  system  has  been  thoroughly  established. 

The  contrast  between  developed  and  undeveloped 
countries  is  made  clear  by  an  examination  of  the  invest- 
ments of  any  investing  nation,  such  as  Great  Britain. 
Great  Britain  in  1913  was  surrounded  by  rich,  prosperous 
neighbors — France,  Germany,  Plolland,  Belgium.  Each 
year  about  a  billion  dollars  in  English  capital  was  invested 
outside  of  the  British  Isles.  Where  did  this  wealth  go? 
The  chief  objectives  of  British  investment,  aside  from  the 


THE  AMERICAN  EMPIRE  125 


British  Dominions  and  the  United  States,  were  (stated  in 
millions  of  pounds)  Argentine  320;  Brazil  148;  Mexico  99; 
Russia  67 ;  France  8  and  Germany  6.  The  wealth  of  Ger- 
many or  France  is  greater  than  that  of  Argentine,  Brazil 
and  Mexico  combined,  but  Germany  and  France  were  de- 
veloped countries,  producing  enough  surplus  for  .  their 
own  needs,  and,  therefore,  the  investable  wealth  of  Great 
Britain  went,  not  to  her  rich  neighbors,  but  to  the  poorer 
lands  across  the  sea. 

Each  nation  that  produces  an  investable  surplus — and 
in  the  nature  of  the  present  economic  system,  every  capi- 
talist nation  must  some  day  reach  the  point  where  it  can  no 
longer  absorb  its  own  surplus  wealth — must  find  some  un- 
developed country  in  which  to  invest  its  surplus.  Other- 
wise the  continuity  of  the  capitalist  world  is  unthinkable. 
Great  Britain,  Belgium,  Holland,  France,  Germany  and 
Japan  all  had  reached  this  stage  before  the  war.  The 
United  States  was  approaching  it  rapidly. 


3.  "Undeveloped  Countries" 

Capitalism  is  so  new  that  the  active  struggle  to  secure 
investment  opportunities  in  undeveloped  countries  is  of  the 
most  recent  origin.  The  voyages  which  resulted  in  the 
discovery,  by  modern  Europeans,  of  the  Americas,  Aus- 
tralia, Japan,  and  an  easy  road  to  the  Orient,  were  all  made 
within  500  years.  The  actual  processes  of  capitalism  are 
products  of  the  past  150  years  in  England,  where  they  had 
their  origin.  In  France,  Germany,  Italy  and  Japan  they 
have  existed  for  less  than  a  century.  The  great  burst  of 
economic  activity  which  has  pushed  the  United  States  so 
rapidly  to  the  fore  as  a  producer  of  surplus  wealth  dates 
from  the  Civil  War.  Only  in  the  last  generation  did  there 
arise  the  financial  imperialism  that  results  from  the  neces- 
sity of  finding  a  market  for  investable  surplus. 

The  struggle  for  world  trade  had  been  waged  for  centuries 
before  the  advent  of  capitalism,  but  the  struggle  for  in- 


126  THE  AMERICAN  EMPIRE 


vestment  opportunities  in  undeveloped  countries  is  strictly 
modern.  The  matter  is  strikingly  stated  by  Amos  Pinchot 
in  his  "Peace  or  Armed  Peace"  (Nov.  11,  1918). 

"If  you  will  look  at  the  maps  following  page  554  of 
Hazen's  'Europe  since  1815,'  or  any  other  standard  colored 
map  showing  Africa  and  Asia  in  1884,  you  will  see  that,  but 
for  a  few  rare  spots  of  coloration,  the  whole  continent  of 
Africa  is  pure  white.  Crossing  the  Red  Sea  into  Arabia, 
Persia,  Mesopotamia  and  Asia  Minor,  you  will  find  the  same 
or  rather  a  more  complete  lack  of  color.  This  is  merely  the 
cartographer's  way  of  showing,  by  tint  and  lack  of  tint, 
that  at  that  time  Africa  and  Western  Asia  were  still  in  the 
hands  of  their  native  populations. 

' '  Let  us  now  turn  to  the  same  maps  thirty  years  later,  i.e., 
in  1914.  We  find  them  utterly  changed.  They  are  no 
longer  white,  but  a  patch  work  of  variegated  hues.  .  .  . 

"From  1870  to  1900,  Great  Britain  added  to  her  posses- 
sions, to  say  nothing  of  her  spheres  of  influence,  nearly 
5,000,000  square  miles  with  an  estimated  population  of 
88,000,000.  Within  a  few  years  after  England 's  permanent 
occupation  of  Egypt,  which  was  the  signal  for  the  re- 
naissance of  French  colonialism,  France  increased  hers  by 
8,500,000  square  miles  with  a  population  of  37,000,000,  not 
counting  Morocco  added  in  1911.  Germany,  whose  colonial- 
ism came  later,  because  home  and  nearby  markets  longer 
rbsorbed  the  product  of  her  machines,  brought  under  her 
dominion  from  1884  to  1899  1,000,000  square  miles  with  an 
estimated  population  of  14,000,000." 

This  is  a  picture  of  the  political  effects  that  followed  the 
economic  causes  summed  up  in  the  term  "financial 
imperialism. ' ' 

In  the  seventeenth  and  eighteenth  centuries  it  was  the 
trader,  dealing  in  raw  stuff;  in  the  nineteenth  century  it 
was  the  manufacturer,  producing  at  low  cost  to  cut  under 
his  neighbor's  price.  During  the  past  thirty  years  the  in- 
vestment banker  has  occupied  the  foreground  with  his 
efforts  to  find  safe,  paying  opportunities  for  the  disposal  of 


THE  AMERICAN  EMPIRE  127 


the  surplus  committed  to  his  care.  British  bankers,  French 
bankers,  German  bankers,  Belgian  bankers,  Dutch  bankers — 
all  intent  upon  the  same  mission — because  behind  all,  and 
relentlessly  driving,  were  the  accumulating  surpluses,  de- 
manding an  outlet.  European  bankers  found  that  outlet  in 
Africa,  Asia,  Australia  and  the  Americas.  The  stupendous 
strides  in  the  development  of  the  resources  in  these  countries 
would  have  been  impossible  but  for  that  siurplus  of  Euro- 
pean capital. 

The  undeveloped  countries  to-day  have  the  same  charac- 
teristics,— virgin  resources,  industrial  and  commercial  pos- 
sibilities, and  in  many  cases  cheap  labor.  This  is  true,  for 
example,  in  China,  Mexico  and  India.  It  is  true  to  a  less 
extent  in  South  America  and  South  Africa.  The  logical 
destination  of  capital  is  the  point  where  the  investment  will 
"pay." 

The  investor  who  has  used  up  the  cream  of  the  home  in- 
vestment market  turns  his  eyes  abroad.  As  a  recent  writer 
has  suggested,  * '  There  is  a  glamor  about  the  foreign  invest- 
ment" which  does  not  hold  for  a  domestic  one.  Foreign 
investments  have  yielded  such  huge  returns  in  the  past  that 
there  is  always  a  seeming  possibility  of  wonderful  gains  for 
the  future.  The  risk  is  greater,  of  course,  but  this  is  more 
than  offset  by  the  increased  rate  of  return.  If  it  were 
not  so,  the  wealth  would  be  invested  at  home  or  held  idle. 


4.  The  Great  Investing  Nations 

The  great  industrial  nations  are  the  great  investing 
nations.  An  agriculture  community  produces  little  surplus 
wealth.  Land  values  are  low,  franchises  and  special 
privileges  are  negligible  factors.  There  can  be  relatively 
little  speculation.  Changes  in  method  of  production  are  in- 
frequent. Changes  in  values  and  total  wealth  are  gradual. 
The  owning  class  in  an  agriculture  civilization  may  live 
comfortably.  If  it  is  very  small  in  proportion  to  the  total 
population  it  may  live  luxuriously,  but  it  cannot  derive 


128  THE  AMERICAN  EMPIRE 


great  revenues  such  as  those  secured  by  the  owning  classes 
of  an  industrial  civilization. 

Industrial  civilization  possesses  all  of  the  factors  for  aug- 
menting surplus  wealth  which  are  lacking  in  agricultural 
civilizations.  Changes  in  the  forms  of  industrial  produc- 
tion are  rapid;  special  privilege  yields  rich  returns  and  is 
the  subject  of  wide  speculative  activity;  land  values  in- 
crease ;  labor  saving  machinery  multiplies  man's  capacity  to 
turn  out  wealth.  As  much  surplus  wealth  might  be  pro- 
duced in  a  year  of  this  industrial  life  as  could  have  been 
turned  out  in  a  generation  or  a  century  of  agricultural 
activity  or  of  hand-craft  industry. 

England,  France,  Germany,  Holland,  Belgium,  Japan 
and  the  United  States,  the  great  industrial  nations,  have 
become  the  great  lending  nations.  Their  search  for  "un- 
developed territory"  and  ** spheres  of  influence"  is  not  a 
search  for  trade,  but  for  an  opportunity  to  invest  and  ex- 
ploit. If  these  nations  wished  to  exchange  cotton  for  coffee, 
or  machinery  for  wheat  on  even  terms,  they  could  exchange 
with  one  another,  or  with  one  of  the  undeveloped  countries, 
but  they  demand  an  outlet  for  surplus  wealth — an  outlet 
that  can  only  be  utilized  where  the  government  of  the 
developed  country  will  giiarantee  the  investment  of  its 
citizens  in  the  undeveloped  territory. 

The  investing  nations  either  want  to  take  the  raw  prod- 
ucts of  the  undeveloped  country,  manufacture  them  and 
sell  them  back  as  finished  material  (the  British  policy  in 
India),  or  else  they  desire  to  secure  possession  of  the  re- 
sources, franchises  and  other  special  privileges  in  the  un- 
developed country  which  they  can  exploit  for  their  own 
profit  (the  British  policy  in  South  America). 

The  Indians,  under  the  British  policy,  are  thus  in  rela- 
tively the  same  position  as  the  workers  in  one  of  the  in- 
dustrial countries.  They  are  paid  for  their  raw  material 
a  fraction  of  the  value  of  the  finished  product.  They  are 
expected  to  buy  back  the  finished  product,  which  is  a  mani- 
fest impossibility.     There  is  thus  a  drastic  limitation  on  the 


THE  AMERICAN  EMPIRE  129 


exploitation  of  undeveloped  countries,  just  as  there  is  a 
limitation  on  the  exploitation  of  domestic  labor.  In  both 
cases  the  people  as  consumers  can  buy  back  less  in  value 
than  the  exploiters  have  to  sell.  Obviously  the  time  must 
come  when  all  the  undeveloped  sections  of  the  world  have 
been  exploited  to  the  limit.     Then  surplus  will  go  a-begging. 

Some  of  the  investors  in  the  great  exploiting  nations  have 
abandoned  the  idea  of  making  huge  returns  by  way  of  the 
English  policy  in  India.  Instead  the  investors  in  every  na- 
tion are  buying  up  resources,  franchises  and  concessions  and 
other  special  privileges  in  the  undeveloped  countries  and 
treating  them  in  exactly  the  same  way  that  they  would  treat 
a  domestic  investment.  In  this  case  the  resources  and  la- 
bor of  the  undeveloped  country  are  exploited  for  the  profit 
of  the  foreign  investor. 

The  Roman  conquerors  subjugated  the  people  politically 
and  then  exacted  an  economic  return  in  the  form  of  trib- 
ute. The  modem  imperialists  do  not  bother  about  the 
political  machinery,  so  long  as  it  remains  in  abeyance,  but 
content  themselves  with  securing  possession  of  the  eco- 
nomic resources  of  a  region  and  exacting  a  return  in  in- 
terest and  dividends  on  the  investment.  Political  tribute 
is  largely  a  thing  of  the  past.  In  its  place  there  is  a  new 
form — economic  tribute — ^which  is*  safer,  cheaper,  and  on 
the  whole  far  superior  to  the  Roman  method  of  exploiting 
undeveloped  regions. 

5.  The  American  Home  Field 

A  hundred  years  ago  the  United  States  was  an  unde- 
veloped country.  Its  resources  were  virgin.  Its  wealth 
possibilities  were  immense.  Both  domestic  and  foreign 
capitalists  invested  large  sums  in  the  canals,  the  railroads 
and  other  American  commercial  and  industrial  enterprises. 
The  rapid  economic  expansion  of  recent  years  has  involved 
the  outlay  of  huge  sums  of  new  capital. 

The  total  capital  invested  in  manufactures  was  8,975 
millions  in  1899  and  22,791  millions  in  1914.     The  total 


130  THE  AMERICAN  EMPIRE 


of  railway  capital  was  11,034  millions  in  1899  and -20,247 
millions  in  1914.  Manufacturing  and  railroading  alone 
secured  a  capital  outlay  of  over  20  billions  in  15  years. 
Some  idea  of  the  increase  in  investments  may  be  gained 
from  the  amount  of  new  stocks  and  bonds  listed  annually 
on  the  New  York  Stock  Exchange.  The  total  amount  of 
new  stocks  listed  for  the  five  years  ending  with  1914  was 
1,420  millions;  the  total  of  new  bonds  was  2,226  million. 
{The  Financial  Beviciv  Annual,  1918,  p.  67.)  The  total 
capital  of  new  companies  (with  an  authorised  capital  of  at 
least  $100,000)  was  in  1918,  $2,599,753,600;  in  1919,  $12,- 
677,229,600,  and  in  the  first  10  months  of  1920,  $12,242,- 
577,700.  (Bradstreets,  Nov.  6,  1920,  p.  731.)  The  fi<^ires 
showing  the  amount  of  stocks  and  bonds  issued  do  not  by 
any  means  exhaust  the  field  of  new  capital.  Reference  has 
already  been  made  to  the  fact  that  the  United  States  Steel 
Corporation,  between  1903  and  1918  increased  its  issues  of 
stocks  and  bonds  by  only  $31,600,000,  while,  in  the  same 
time  its  assets  increased  $987,000,000,  The  same  fact  is 
illustrated,  on  a  larger  scale,  in  a  summary  (Wall  Street 
Journal,  August  7,  1919)  of  the  finances  of  104  corpora- 
tions covering  the  four  years,  December  31,  1914,  to  De- 
cember 31,  1918.  During  this  time,  six  of  the  leading  steel 
companies  of  the  United  States  increased  their  working 
capital  by  $461,965,000  and  their  surplus  by  $617,656,000. 
This  billion  v/as  taken  out  of  the  earnings  of  the  com- 
panies. Concerning  the  entire  104  corporations,  the  Jour- 
nal notes  that,  **  After  heavy  expenditures  for  new  con- 
struction and  acquisitions,  and  record  breaking  dividends, 
they  added  a  total  of  nearly  $2,000,000,000  to  working 
capital."  In  addition,  these  corporations,  in  four  years, 
showed  a  gain  of  $1,941,498,000  in  surplus  and  a  gain  in 
inventories  of  $1,522,000,000. 

Considerable  amounts  of  capital  are  invested  in  private 
industry,  by  individuals  and  partnerships.  No  record  of 
these  investments  ever  appears.  Farmers  invest  in  ani- 
mals, machinery  and  improved  buildings — investments  that 
are  not  represented  by  stocks  or  bonds.  Again,  the  great 
corporations  themselves  are  constantly  adding  to  their  as- 


THE  AMERICAN  EMPIRE  131 


sets  without  increasing  their  stock  or  bond  issues.  In 
these  and  other  ways,  billions  of  new  capital  are  yearly 
absorbed  by  the  home  investment  market. 

Although  most  of  the  enterprises  of  the  United  States 
have  been  floated  with  American  capital,  the  investors  of 
Great  Britain,  Holland,  France  and  other  countries  took  a 
hand.  In  1913  the  capitalists  of  Great  Britain  had  larger 
investments  in  the  United  States  than  in  any  other  coun- 
try, or  than  in  any  British  Dominion.  (The  U.  S.,  754,- 
617,000  pounds;  Canada  and  Newfoundland,  514,870,000 
pounds ;  India  and  Ceylon,  378,776,000  pounds ;  South  Af- 
rica, 370,192,000  pounds  and  so  on.  {Annals,  1916,  Vol.  68, 
p.  28,  Article  by  C.  K.  Hobson.)  The  aggregate  amount 
of  European  capital  invested  in  the  United  States  v/as  ap- 
proximately $6,500,000,000  in  1910.  Of  this  sum  more 
than  half  was  British.  ("Trade  Balance  of  the  United 
States,"  George  Paisch.  National  Monetary  Commission, 
1910,  p.  175.) 

By  the  beginning  of  the  present  century  (the  U.  S.  Steel 
Corporation  was  organized  in  1901)  the  main  work  of  or- 
ganization inside  of  the  United  States  was  completed.  The 
bankers  had  some  incidental  tasks  before  them,  but  the 
industrial  leaders  themselves  had  done  their  pioneer  duty. 
There  were  comers  to  be  smoothed  off,  and  bearings  to  be 
rubbed  down,  but  the  great  structural  problems  had  been 
solved,  and  the  foundations  of  world  industrial  empire 
had  been  laid. 

6.  Leaving  the  Home  Field 

The  Spanish-American  War  marks  the  beginning  of  the 
new  era  in  American  business  organization.  This  war 
found  the  American  people  isolated  and  provincial.  It 
left  them  with  a  new  feeling  for  their  own  importance. 

The  worlds  at  home  had  been  conquered.  The  trans- 
continental railroads  had  been  built ;  the  steel  industry,  the 
oil  industry,  the  coal  industry,  the  leather  industry,  the 
woolen  industry  and  a  host  of  others  had  been  organized 


132  THE  AMERICAN  EMPIRE 


by  a  whole  generation  of  industrial  organizers  who  had 
given  their  lives  to  this  task. 

Across  the  borders  of  the  United  States — almost  within 
arm's  reach  of  the  eager,  stirring,  high-strung  men  of  the 
new  generation,  there  were  tens  of  thousands  of  square 
miles  of  undeveloped  territory — territory  that  W'as  fabu- 
lously rich  in  ore,  in  timber,  in  oil,  in  fertility.  On  every 
side  the  lands  stretched  away — Mexico,  the  West  Indies, 
Central  America,  Canada — with  opportunity  that  was  to 
be  had  for  the  taking. 

Opportunity  called.  Capital,  seeking  new  fields  for  in- 
vestment, urged.  Youth,  enthusiasm  and  enterprise  an- 
swered the  challenge. 

The  foreign  investments  of  the  United  States  at  the  time 
of  the  Spanish-American  War  were  negligible.  By  1910 
American  business  men  had  two  billions  invested  abroad — 
$700,000,000  in  Mexico;  $500,000,000  in  Canada;  $350,- 
000,000  in  Europe,  and  smaller  sums  in  the  West  Indies, 
the  Philippines,  China,  Central  and  South  America.  In 
1913  there  was  a  billion  invested  in  Mexico  and  an  equal 
amount  in  Canada.  ("Commercial  Policy,"  W.  S.  Cul- 
bertson.  New  York,  Appleton,  1919,  p.  315.) 

Capital  flowed  out  of  the  United  States  in  two  directions : 

1.  Toward  the  resources  which  were  so  abundant  in  cer- 
tain foreign  countries. 

2.  Toward  foreign  markets. 

7.  Building  on  Foreign  Resources 

The  Bethlehem  Steel  Corporation  is  a  typical  industry 
that  has  built  up  foreign  connections  as  a  means  of  ex- 
ploiting foreign  resources.  The  Corporation  has  a  huge 
organization  in  the  United  States  which  includes  10  manu- 
facturing plants,  a  coke  producing  company,  11  ship  build- 
ing plants,  six  mines  and  quarries,  and  extensive  coal  de- 
posits in  Pennsylvania  and  West  Virginia.  The  Bethlehem 
Steel  Corporation  also  controls  ore  properties  near  San- 


THE  AMERICAN  EMPIRE  133 


tiago,  Cuba,  near  Nipe  Bay,  Cuba,  and  extensive  deposits 
along  the  northern  coast  of  Cuba;  large  ore  properties  at 
Tofo,  Chile,  and  the  Ore  Steamship  Corporation,  a  carry- 
ing line  for  Chilean  and  Cuban  ore. 

The  American  Smelting  and  Refining  Company  is  an- 
other illustration  of  expansion  into  a  foreign  country  for 
the  purpose  of  utilizing  foreign  resources.     According  to 
the  record  of  the  Company's  properties,  the  Company  was 
operating  six  refining  plants,  one  located  in  New  Jersey; 
one  in  Nebraska ;  one  in  California ;  one  in  Illinois ;  one  in 
Maryland,  and  one  in  Washington.     The  Company  owned 
14  lead  smelters  and  11  copper  smelters,  located  as  follows 
Colorado,  4;  Utah,  2;  Texas,  2;  Arizona,  2;  New  Jersey,  2 
Montana,  1 ;  Washington,  1 ;  Nebraska,  1 ;  California,  1 
Illinois,  1;  Chile,  2;  Mexico,  6.     Among  these  25  plants  a 
third  is  located  outside  of  the  United  States. 

These  are  but  two  examples.  The  rubber,  oil,  tobacco  and 
sugar  interests  have  pursued  a  similar  policy — extending 
their  organization  in  such  a  way  as  to  utilize  foreign  re- 
sources as  a  source  for  the  raw  materials  that  are  destined 
to  be  manufactured  in  the  United  States. 


8.  Manufacturing  and  Marketing  Abroad 

The  Bethlehem  Steel  Corporation  and  the  American 
Smelting  and  Refining  Company  go  outside  of  the  United 
States  for  the  resources  upon  which  their  industries  de- 
pend. Their  fabricating  industries  are  carried  on  inside  of 
the  country.  There  are  a  number  of  the  great  industries 
of  the  country  that  have  gone  outside  of  the  United  States 
to  do  their  manufacturing  and  to  organize  the  marketing 
of  their  products. 

The  International  Harvester  Company  has  built  a  world- 
wide organization.  It  manufactures  harvesting  machinery, 
farm  implements,  gasoline  engines,  tractors,  wagons  and 
separators  at  Springfield,  Ohio;  Rock  Falls,  111.;  Chicago, 
111.;  Auburn,  New  York;  Akron,  Ohio;  Milwaukee,  Wise, 


134  THE  AMERICAN  EMPIRE 


and  West  Pullman,  111.  It  has  iron  mines,  coal  mines  and 
steel  plants  operated  by  the  Wisconsin  Steel  Company.  It 
has  three  twine  mills  and  four  railways.  Foreign  plants 
and  branches  are  listed  as  follows :  Norrkoping,  Sweden ; 
Copenhagen,  Denmark;  Cliristiania,  Norway;  Paris, 
France ;  Croix,  France ;  Berlin,  Germany ;  Hamilton,  On- 
tario, Canada;  Zurich,  Switzerland;  Vienna,  Austria;  Lu- 
bertzy,  Russia;  Neuss,  Germany;  Melbourne,  Australia; 
London,  England ;  Christ  Church,  New  Zealand. 

One  of  the  greatest  industrial  empires  in  the  world  is 
the  Standard  Oil  Properties.  It  is  not  possible  to  go  into 
detail  with  regard  to  their  operations.  Space  will  admit 
of  a  brief  comment  upon  one  of  the  constituent  parts  or 
"states"  of  the  empire — The  Standard  Oil  Company  of 
New  Jersey.  With  a  capital  stock  of  $100,000,000,  this 
Company,  from  the  dissolution  of  the  Standard  Oil  Com- 
pany, December  15,  1911,  to  June  15,  1918,  a  period  of 
six  and  a  half  years,  paid  dividends  of  $174,058,932. 

The  company  describes  itself  as  "  a  manufacturing  enter- 
prise with  a  large  foreign  business.  The  company  drills 
oil  wells,  pumps  them,  refines  the  crude  oil  into  many 
forms  and  sells  the  product — mostly  abroad."  {The  Lamp, 
May,  1918.)  The  properties  of  the  Company  are  thus 
listed : 

1.  The  Company  has  13  refineries,  seven  of  them  in  New 
Jersey,  Maryland,  Oklahoma,  Louisiana  and  West  Virginia. 
Four  of  the  remaining  refineries  are  located  in  Canada,  one 
is  in  Mexico  and  one  in  Peru. 

2.  Pipeline  properties  in  New  York,  New  Jersey,  Penn- 
sylvania and  Maryland. 

3.  A  fleet  of  54  ocean-going  tank  steamers  with  a  ca- 
pacity of  486,480  dead  weight  tons,  (This  is  about  two 
per  cent  of  the  total  ocean-going  tonnage  of  the  world.) 

4.  Can  and  case  factories,  barrel  factories,  canning 
jilants,  glue  factories  and  pipe  shops. 

5.  Through  its  subsidiary  corporations,  the  Company 
controls : 


THE  AMERICAN  EMPIRE  135 


a.  Oil  wells  in  Pennsylvania,  West  Virginia,  Ohio,  Ken- 
tucky, Louisiana,  Arkansas,  Mississippi,  Texas,  California, 
Peru  and  Mexico.  In  connection  with  many  of  these  prop- 
erties refineries  are  operated. 

b.  One  subsidary  has  550  marketing  stations  in  Canada. 
Others  market  in  various  parts  of  the  United  States;  in 
the  West  Indies ;  in  Central  and  South  America ;  in  Ger- 
many, Austria,  Roumania,  the  Netherlands,  France,  Den- 
mark and  Italy. 

The  Standard  Oil  Company  of  New  Jersey  comprises 
only  one  part — though  a  very  successful  part — of  the  Stand- 
ard Oil  Group  of  industries.  It  is  one  industrial  state  in 
a  great  industrial  empire. 

Foreign  resources  offer  opportunities  to  the  exploiter. 
Foreign  markets  beckon.  Both  calls  have  been  heeded  by 
the  American  business  interests  that  are  busy  building  the 
international  machinery  of  business  organization. 


9.  International  Business  and  Finance 

The  steel,  smelting,  oil,  sugar,  tobacco,  and  harvester 
interests  are  confined  to  relatively  narrow  lines.  In  their 
wake  have  followed  general  business,  and  above  all,  finan- 
cial activities. 

The  American  International  Corporation  was  described 
by  its  vice-president  (Mr.  Connick)  before  a  Senate  Com- 
mittee on  March  1,  1918.  "Until  the  Russian  situation  be- 
came too  acute,  they  had  offices  in  Petrograd,  London, 
Paris,  Rome,  Llexico  City.  They  sent  commissions  and 
agents  and  business  men  to  South  America  to  promote 
trade.  .  .  .  They  were  negotiating  contracts  for  a  thousand 
miles  of  railroad  in  China.  They  were  practically  rebuild- 
ing, you  might  say,  the  Grand  Canal  in  China.  They  had 
acquired  the  Pacific  Mail.  .  .  .  They  then  bought  the  New 
York  Shipbuilding  Corporation  to  provide  ships  for  their 
shipping  interests. ' ' 


136  THE  AMERICAN  EMPIRE 


By  1919  {New  York  Times,  Oct.  31,  1919)  the  Company 
had  acquired  Carter  Macy  &  Co.,  and  the  Rosin  and  Tur- 
pentine Export  Co.,  and  was  interested  in  the  International 
Mercantile  Marine  and  the  United  Fruit  Companies. 

Another  illustration  of  the  same  kind  of  general  foreign 
business  appeared  in  the  form  of  an  advertisement  inserted 
on  the  financial  page  of  the  New  York  Times  (July  10, 
1919)  by  three  leading  financial  firms,  which  called  at- 
tention to  a  $3,000,000  note  issue  of  the  Ilaytian  American 
Corporation  "Incorporated  under  the  laAvs  of  the  State  of 
New  York,  owning  and  operating  sugar,  railroad,  wharf 
and  public  utility  companies  in  the  Republic  of  Ilayti." 
Further,  the  advertisers  note:  "The  diversity  of  the  Com- 
pany's operations  assures  stability  of  earnings." 

American  manufacturers,  traders  and  industrial  empire 
builders  have  not  gone  alone  into  the  foreign  field.  The 
bankers  have  accompanied  them. 

Several  of  the  great  financial  institutions  of  the  country 
are  advertising  their  foreign  connections. 

The  Guaranty  Trust  Company  {New  York  Times,  Jan. 
10,  1919)  advertises  under  the  caption  "Direct  Foreign 
Banking  Facilities"  offering  "a  direct  and  comprehensive 
banking  service  for  trade  with  all  countries."  These  con- 
nections include : 

1.  Branches  in  London  and  Paris,  which  are  designated 
United  States  depositories.  "They  are  American  institu- 
tions conducted  on  American  lines,  and  are  especially  well 
equipped  to  render  banking  service  throughout  Europe." 
There  are  additional  branches  in  Liverpool  and  Brussels. 
The  Company  also  has  direct  connections  in  Italy  and 
Spain,  and  representatives  in  the  Scandinavian  countries. 

2.  "Direct  connections  with  the  leading  financial  insti- 
tutions in  Argentina,  Uruguay,  Chile,  and  Brazil."  A  spe- 
cial representative  in  Buenos  Ayres.  "Through  our  affilia- 
tion with  the  Mercantile  Bank  of  the  Americas  and  its 
connections,  we  cover  Peru,   Northern  Brazil,   Columbia, 


THE  AMERICAN  EMPIRE  137 


Ecuador,  Venezuela,  Nicaragua,  Honduras,  Guatemala,  and 
other  South  and  Central  American  countries." 

3.  "Through  the  American  Mercantile  Bank  of  Cuba, 
at  Havana,  we  cover  direct  Cuba  and  the  West  Indies." 

4.  "Direct  banking  and  merchant  service  throughout 
British  India,"  together  with  correspondents  in  the  East 
Indies  and  the  Straits  Settlements. 

5.  "Direct  connections  with  the  National  Bank  of  South 
Africa,  at  Cape  Town,  and  its  many  branches  in  the  Trans- 
vaal, Rhodesia,  Natal,  Mozambique,  etc." 

6.  Direct  banking  connections  and  a  special  representa- 
tive in  Australia  and  New  Zealand. 

7.  *  *  Through  our  affiliations  with  the  Asia  Banking  Cor- 
poration we  negotiate,  direct,  banking  transactions  of  every 
nature  in  China,  Manchuria,  Southeastern  Siberia,  and 
throughout  the  Far  East.  The  Asia  Banking  Corporation 
has  its  main  office  in  New  York  and  is  establishing  branches 
in  these  important  trade  centers:  Shanghai,  Pekin,  Tient- 
sin, Hankow,  Harbin,  Vladivostok.  We  are  also  official 
correspondents  for  leading  Japanese  banks." 

The  advertisement  concludes  with  this  statement :  ' '  Our 
Foreign  Trade  Bureau  collects  and  makes  available  accurate 
and  up-to-date  information  relating  to  foreign  trade — ex- 
port markets,  foreign  financial  and  economic  conditions, 
shipping  facilities,  export  technique,  etc.  It  endeavors  to 
bring  into  touch  buyers  and  sellers  here  and  abroad. ' ' 

The  same  issue  of  the  Times  carries  a  statement  of  the 
Mercantile  Bank  of  the  Americas  which  "offers  the  serv- 
ices of  a  banking  organization  with  branches  and  affiliated 
banks  in  important  trade  centers  throughout  Central  and 
South  America,  France  and  Spain."  The  Bank  describes 
itself  as  "an  American  Bank  for  Foreign  trade."  Among 
its  eleven  directors  are  the  President  and  two  Vice-Presi- 
dents of  the  Guaranty  Trust  Company. 

The  Asia  Banking  Corporation,  upon  which  the  Guar- 
anty Trust  Company  relies  for  its  Eastern  connections,  was 
organized  in  1918  "to  engage  in  international  and  foreign 


133  THE  AMERICAN  EMPIRE 


banking  in  China,  in  tlie  dependencies  and  insular  posses- 
sions of  the  United  States,  and,  ultimately  in  Siberia" 
{Standard  Corporation  Service,  May- August,  1918,  p.  42). 
The  officers  elected  in  August  1918,  were  Charles  II.  Sabiu, 
President  of  the  Guaranty  Trust  Co.,  President;  Albert 
Breton,  Vice-President  of  the  Guaranty  Trust  Co.,  and 
Ralph  Dawson,  Assistant  Secretary  of  the  Guaranty  Trust 
Company,  Vice-Presidents,  and  Robert  A.  Shaw,  of  the 
overseas  division  of  the  Guaranty  Trust  Company,  Treas- 
urer. Among  the  directors  are  representatives  of  the  Bank- 
ers Trust  Company  and  of  the  Mercantile  Bank  of  the 
Americas. 

10.  The  National  City  Bank 

The  National  City  Bank  of  New  York — the  first  bank  in 
the  history  of  the  Western  Hemisphere  to  show  resources 
exceeding  one  billion  dollars — illustrates  in  its  develop- 
ment the  cyclonic  changes  that  the  past  few  years  have 
brought  into  American  business  circles.  The  National  City 
Bank,  originally  chartered  in  1812,  had  resources  of  $16,- 
750,929  in  1879  and  of  $18,214,823  in  1889.  From  that 
point  its  development  has  been  electric.  The  resources  of 
the  Bank  totaled  128  millions  in  1899;  280  millions  in 
1909 ;  $1,039,418,324  in  1919.  Between  1889  and  1899  they 
increased  600  per  cent;  between  1899  and  1919  they  in- 
creased 700  per  cent;  during  the  40  years  from  1889  and 
1919  the  increase  in  resources  exceeded  six  thousand  per 
cent. 

The  organization  of  the  Bank  is  indicative  of  the  organi- 
zation of  modern  business.  Among  the  twenty-one  direc- 
tors, all  of  whom  are  engaged  in  some  form  of  business 
enterprise,  there  are  the  names  of  William  Rockefeller, 
Percy  A.  Rockefeller,  J.  Ogden  Armour,  Cleveland  H. 
Dodge  of  the  Phelps-Dodge  Corporation,  Cyrus  H.  Mc- 
Cormick  of  the  International  Harvester  Co.,  Philip  A.  S. 
Franklin,  President  of  the  International  Mercantile  Ma- 
rine Co.;  Earl  D.  Babst,  President  of  the  American  Sugar 
Refining  Co.;  Edgar  Palmer,  President  of  the  New  Jersey 


THE  AMERICAN  EMPIRE  139 


Zinc  Co. ;  Nathan  C.  Kingsbury,  Vice-President  of  the  Un- 
ion Pacific  Railroad  Co.,  and  Frank  Krumball,  Chairman 
of  the  Chesapeake  &  Ohio  Railroad  Co.  Some  of  the  most 
powerful  mining,  manufacturing,  transportation  and  pub- 
lic utility  interests  in  the  United  States  are  represented, 
directly  or  indirectly,  in  this  list. 

The  domestic  organization  of  the  Bank  consists  of  five 
divisions,  each  one  under  a  vice-president.  New  York  City 
constitutes  the  first  division;  the  second  division  comprises 
New  England  and  Now  York  State  outside  of  Nev/  York 
City;  the  three  remaining  divisions  cover  the  other  por- 
tions of  the  United  States.  Except  for  the  size  and  the 
completeness  of  its  organization,  the  National  City  Bank 
differs  in  no  essential  particulars  from  numerous  other 
large  banking  institutions.  It  is  a  financial  superstructure 
built  upon  a  massive  foundation  of  industrial  enterprise. 

The  phase  of  the  Bank's  activity  that  is  of  peculiar  sig- 
nificance at  the  present  juncture  is  its  foreign  organization, 
all  of  which  has  been  established  since  the  outbreak  of  the 
European  war. 

The  foreign  business  of  the  National  City  Bank  is  car- 
ried on  by  the  National  City  Bank  proper  and  the  Inter- 
national Banking  Corporation.  The  first  foreign  branch 
of  the  National  City  Bank  was  established  at  Buenos  Aires 
on  November  10th,  1914.  On  January  1st,  1919,  the  Na- 
tional City  Bank  had  a  total  of  15  foreign  branches;  on 
December  31st,  1919,  it  had  a  total  of  74  foreign  branches. 

The  policy  of  the  Bank  in  its  establishment  of  foreign 
branches  is  described  thus  in  its  "Statement  of  Condition, 
December  31st,  1919":  *'The  feature  of  branch  develop- 
ment during  the  year  was  the  expansion  in  Cuba,  where 
twenty-two  new  branches  were  opened,  making  twenty-four 
in  the  island.  Cuba  is  very  prosperous,  as  a  result  of  the 
expansion  of  the  sugar  industry,  and  as  sugar  is  produced 
there  under  very  favorable  conditions  economically,  and  the 
location  is  most  convenient  for  supplying  the  United  States, 
the  industry  is  on  a  sound  basis,  and  relations  with  tlie 


140  THE  AMERICAN  EMPIRE 


United  States  are  likely  to  continue  close  and  friendly. 
Cuba  is  a  market  of  growing  importance  to  the  United 
States,  and  the  system  of  branches  established  by  the  Bank 
is  designed  to  serve  the  trade  between  the  two  countries." 
The  trader  and  the  Banker  are  to  work  hand  in  hand. 

The  National  City  Bank  has  branches  in  Argentina, 
Brazil,  Belgium,  Chile,  Colombia,  Cuba,  Italy,  Porto  Rico, 
Russia,  Siberia,  Spain,  Trinidad,  Uruguay  and  Venezuela, 
all  of  which  have  been  established  since  1914. 

A  portion  of  the  foreign  business  of  the  National  City 
Bank  is  conducted  by  the  International  Banking  Corpora- 
tion which  was  established  in  1902  and  which  became  a 
part  of  the  National  City  Bank  organization  in  1915.  The 
International  Banking  Corporation  has  a  total  of  twenty- 
eight  branches  located  in  California,  China,  England, 
France,  India,  Japan,  Java,  Dominican  Republic,  Philip- 
pine Islands,  Republic  of  Panama  and  the  Straits  Settle- 
ments. Under  this  arrangement,  the  financial  relations 
with  America  are  made  by  the  National  City  Bank  proper ; 
while  those  with  Europe  and  Asia  are  in  the  hands  of  the 
International  Banking  Corporation  and  the  combination 
provides  the  Bank  with  75  branches  in  addition  to  its  vast 
organization  within  the  United  States. 

The  National  City  Bank  of  1889,  with  its  resources  of 
eighteen  millions,  was  a  small  affair  compared  with  the 
billion  dollar  resources  of  1920.  Thirty  years  sufficed  for 
a  growth  from  youth  to  robust  adulthood.  Within  five 
years,  the  Bank  built  up  a  system  of  foreign  branches  that 
make  it  one  of  the  most  potent  States  in  the  federation  of 
international  financial  institutions. 

11.  Onward 

Exploiters  of  foreign  resources,  manufacturers,  traders 
and  bankers  have  moved,  side  by  side,  out  of  the  United 
States  into  the  foreign  field.  Step  by  step  they  have  ad- 
vanced, rearing  the  economic  structure  of  empire  as  they 
went. 


THE  AMERICAN  EMPIRE  141 


The  business  men  of  the  United  States  had  no  choice. 
They  could  not  pause  when  they  had  spanned  the  continent. 
Ambition  called  them,  surplus  compelled  them,  profits 
lured  them,  the  will  to  power  dominated  their  lives.  As 
well  expect  the  Old  Guard  to  pause  in  the  middle  of  a 
charge — even  before  the  sunken  road  at  "Waterloo — as  to 
expect  the  business  interests  of  the  United  States  to  cease 
their  efForts  and  lay  down  their  tools  of  conquest  simply  be- 
cause they  had  reached  the  ocean  in  one  direction.  While 
there  were  left  other  directions  in  which  there  was  no 
ocean;  while  other  undeveloped  regions  offered  the  possi- 
bility of  development,  an  inexorable  fate — the  fate  inherent 
in  the  economic  and  the  human  stuff  with  which  they  were 
working  compelled  them  to  cry  "Onward!"  and  to  turn  to 
the  tasks  that  lay  ahead. 

The  fathers  and  grandfathers  of  these  Twentieth  Cen- 
tury American  Plutocrats,  working  coatless  in  their  tiny 
factories;  managing  their  corner  stores;  serving  their  lo- 
cal banks,  and  holding  their  minor  oflBces  had  never 
dreamed  of  the  destiny  that  lay  ahead.  No  matter.  The 
necessity  for  expansion  had  come  and  with  it  came  the  op- 
portunity. The  economic  pressure  complemented  the  hu- 
man desire  for  "more."  The  structure  of  business  organi- 
zation, which  was  erected  to  conquer  one  continent  could 
not  cease  functioning  when  that  one  continent  was  sub- 
dued. Rather,  high  geared  and  speeded  up  as  it  was,  it 
was  in  fine  form  to  extend  its  conquests,  like  the  well 
groomed  army  that  has  come  scatheless  through  a  great 
campaign,  and  that  longs,  throughout  its  tensely  unified 
structure  to  be  off  on  the  next  mission. 

The  business  life  of  the  United  States  came  to  the  Pa- 
cific ;  touched  the  Canadian  border ;  surged  against  the  Rio 
Grande.  The  continent  had  been  spanned;  the  objective 
had  been  attained.     Still,  the  cry  was  * '  Onward ! ' ' 

Onward?    Whither? 

Onward  to  the  lands  where  resources  are  abundant  and 
rich ;  onward  where  labor  is  plentiful,  docile  and  cheap ;  on- 


142  THE  AMERICAN  EMPIRE 


ward  where  the  opportunities  for  huge  profits  are  met 
with  on  every  hand;  onward  into  the  undeveloped  coun- 
tries of  the  world. 

The  capitalists  of  the  European  nations,  faced  by  a 
similar  necessity  for  expansion,  had  been  compelled  to  go 
half  round  the  eartli  to  India,  to  South  Africa,  to  th^  East 
Indies,  to  China,  to  Canada,  to  South  America.  Close  at 
home  there  was  no  country  except  Russia  that  offered  great 
possibilities  of  development. 

The  business  interests  of  the  United  States  were  more 
fortunate.  At  their  very  doors  lay  the  opportuniteis — in 
Canada,  in  Mexico,  in  the  West  Indies,  in  Central  and 
South  America.  Here  were  countries  with  the  amplest, 
richest  resources ;  countries  open  for  capitalist  development. 
To  be  sure  these  investment  fields  had  been  invaded  al- 
ready by  foreign  capitalists — British,  German,  Belgian  and 
Spanish.  But  at  the  same  time  they  were  surrounded  by 
a  tradition  of  great  virility  and  power — the  tradition  of 
"America  for  the  Americans." 


THE  AMERICAN  EMPIRE  14c 


XI.    THE  GREAT  WAR 

1.  Daylight 

The  work  of  industrial  empire  building  had  continued 
for  less  than  half  a  century  when  the  United  States  en- 
tered the  Great  War,  which  was  one  in  a  sequence  of 
events  that  bound  America  to  the  wheel  of  destiny  as  it 
bound  England  and  France  and  Germany  and  Japan  and 
every  other  country  that  had  adopted  the  capitalist  method 
of  production. 

The  war-test  revealed  the  United  States  to  the  world  and 
to  its  own  people  as  a  great  nation  playing  a  mighty  role 
in  international  affairs.  Most  Europeans  had  not  suspected 
the  extent  of  its  power.  Even  the  Americans  did  not  re- 
alize it.  Nevertheless,  the  processes  of  economic  empire 
building  had  laid  a  foundation  upon  which  the  super- 
structure of  political  empire  is  reared  as  a  matter  of 
course.  Henceforth,  no  one  need  ask  whether  the  United 
States  should  or  should  not  be  an  imperial  nation.  There 
remained  only  the  task  of  determining  what  form  Ameri- 
can imperialism  should  take. 

The  Great  War  rounded  out  the  imperial  beginnings  of 
the  United  States.  It  strengthened  the  plutocracy  at 
home ;  it  gave  the  United  States  immense  prestige  abroad. 

The  Era  of  Imperialism  dawned  upon  the  United  States 
in  1898.  Daylight  broke  in  1914,  and  the  night  of  isola- 
tion and  of  international  unimportance  gave  place  to  a  new 
day  of  imperial  power. 

2.  Plutocracy  in  the  Saddle 

The  rapid  sweep  across  a  new  continent  had  placed  the 
resources  of  the  United  States  in  the  hands  of  a  powerful 
minority.  Nature  had  been  generous  and  private  owner- 
ship of  the  inexhaustible  wilderness  seemed  to  be  the  nat- 
ural— the  obvious  method  of  procedure. 


144  THE  AMERICAN  EMPIRE 

The  lightning  march  of  the  American  people  across  the 
continent  gave  the  plutocracy  its  grip  on  the  natural  re- 
sources. The  revolutionary  transformations  in  industry 
guaranteed  its  control  of  the  productive  machineiy. 

The  wizards  of  industrial  activity  have  changed  the  struc- 
ture of  business  life  even  more  rapidly  than  they  have  con- 
quered the  wilderness.  True  sons  of  their  revolutionary 
ancestors,  they  have  slashed  and  remodeled  and  built  anew 
with  little  regard  for  the  past. 

Revolutions  are  the  stalking  grounds  of  predatory  power. 
Napoleon  built  his  empire  on  the  French  Revolution ;  Crom- 
well on  the  revolt  against  tyrannical  royalty  in  England. 
Peaceful  times  give  less  opportunity  to  personal  ambition. 
Institutions  are  well-rooted,  customs  and  habits  are  firmly 
placed,  life  is  regulated  and  held  to  earth  by  a  fixed  frame- 
work of  habit  and  tradition. 

Revolution  comes — fiercely,  impetuously — uprooting  insti- 
tutions, overthrowing  traditions,  tearing  customs  from 
their  resting  places.  All  is  uncertainty — chaos,  when,  lo! 
a  man  on  horseback  gathers  the  loose  strands  together  say- 
ing, * '  Good  people,  I  know,  follow  me ! " 

He  does  know;  but  woe  to  the  people  who  follow  him  I 
Yet,  what  shall  they  do?  "Whither  shall  they  turn?  How 
shall  they  act  ?  Who  can  be  relied  upon  in  this  uncertain 
hour? 

The  man  on  horseback  rises  in  his  stirrups — speaking  in 
mighty  accents  his  message  of  hope  and  cheer,  reassuring, 
promising,  encouraging,  inspiring  all  who  come  within  the 
sound  of  his  voice.  His  is  the  one  assurance  in  a  wilder- 
ness of  uncertainty.  What  wonder  that  the  people  follow 
where  he  leads  and  beckons ! 

The  revolutionary  changes  in  American  economic  life  be- 
tween the  Civil  War  and  the  War  of  1914  gave  the  plu- 
tocrat his  chance.  He  was  the  man  on  horseback,  quick, 
clever,  shrewd,  farseeing,  persuasive,  powerful.  Through 
the  courses  of  these  revolutionary  changes,  the  Hills, 
Goulds,    Harrimans,    Wideners,    Weyerhausers,    Guggen- 


THE  AMERICAN  EMPIRE  145 


heims,  Rockefellers,  Carnegies,  and  Morgans  did  to  the 
American  economic  organization  exactly  what  Napoleon 
did  to  the  French  political  organization — they  took  pos- 
session of  it. 

3.  Making  the  Plutocracy  Be  Good 

The  American  people  were  still  thinking  the  thoughts  of 
a  competitive  economic  life  when  the  cohorts  of  an  organ- 
ized plutocracy  bore  down  upon  them.  High  prices,  trusts, 
millionaires,  huge  profits,  corruption,  betrayal  of  public 
office  took  the  people  by  surprise,  confused  them,  baffled 
them,  enraged  them.  Their  first  thought  was  of  politics, 
and  during  the  years  immediately  preceding  the  war  they 
were  busy  with  the  problem  of  legislating  goodness  into 
the  plutocracy. 

The  plutocrats  were  in  public  disfavor,  and  their  con- 
trol of  natural  resources,  banks,  railroads,  mines,  factories, 
political  parties,  public  offices,  governmental  machinery,  the 
school  system,  the  press,  the  pulpit,  the  movie  business, — 
all  of  this  power  amounted  to  nothing  unless  it  was  backed 
by  public  opinion. 

How  could  the  plutocracy — the  discredited,  vilified  plu- 
tocracy— get  public  opinion?  How  could  the  exploiters 
gain  the  confidence  of  the  American  people?  There  was 
only  one  way — they  must  line  up  with  some  cause  that 
would  command  public  attention  and  compel  public  sup- 
port. The  cause  that  it  chose  was  the  "defense  of  the 
United  States." 

4.  *' Preparedness" 

The  plutocracy,  with  a  united  front,  "went  in'*  for  the 
"defense  of  the  tjnited  States," — attacking  the  people  on 
the  side  of  their  greatest  weakness;  playing  upon  their 
primitive  emotions  of  fear  and  hate.  The  campaign  was 
intense  and  dramatic,  featuring  Japanese  invasions,  Mexi- 
can inroads,  and  a  world  conquest  by  Germany. 


146  THE  AMERICAN  EMPIRE 


The  preparedness  campaign  was  a  marvel  of  efficient 
business  organization.  Its  promoters  made  use  of  every 
device  known  to  the  advertising  profession ;  the  best  brains 
Iwere  employed,  and  the  country  was  blanketed  with  pre- 
paredness propaganda. 

Officers  of  the  Army  and  Navy  were  frank  in  insisting 
that  the  defense  of  the  United  States  was  adequately  pro- 
vided for.  (See  testimony  of  General  Nelson  A.  Miles. 
Congressicmal  Record,  February  3,  1916,  p.  2265.)  Still 
the  preparedness  campaign  continued  with  vigor.  Con- 
gressman Clyde  H.  Tavenner  in  his  speech,  "The  Navy 
League  Unmasked, ' '  showed  why.  He  gave  facts  like  those 
apppearing  in  George  R.  Kirkpatrick's  book,  ''"War,  What 
For";  in  F.  C.  Howe's  *'Wliy  War,''  and  in  J.  A.  Hob- 
son's  ** Imperialism,"  showing  that,  in  the  words  of  an 
English  authority,  "patriotism  at  from  10  to  15  per  cent 
is  a  temptation  for  the  best  of  citizens. ' ' 

Tavenner  established  the  connection  between  the  pre- 
paredness campaign  and  those  who  were  making  profits  out 
of  the  powder  business,  the  nickel  business,  the  copper  busi- 
ness, and  the  steel  business,  interlocked  through  interlock- 
ing directorates ;  then  he  established  the  connection  between 
the  Navy  League  and  the  firm  of  J.  P.  Morgan  &  Co.,  23 
Wall  St.,  New  York.  Regarding  this  connection.  Congress- 
man Tavenner  said,  "The  Navy  League  upon  close  exam- 
ination would  appear  to  be  little  more  than  a  branch  office 
of  the  house  of  J.  P.  Morgan  &  Co.,  and  a  general  sales 
promotion  bureau  for  the  various  armor  and  munition 
makers  and  the  steel,  nickel,  copper  and  zinc  interests. ' '  ^ 

The  preparedness  movement  came  from  the  business  in- 
terests. It  was  fostered  and  financed  by  the  plutocrats. 
It  was  their  first  successful  effort  at  winning  public  con- 
fidence, and  so  well  was  it  managed  that  millions  of  Ameri- 
cans fell  into  line,  fired  by  the  love  of  the  flag  and  the 
world-old  devotion  to  family  and  fireside. 


i"The  Navy   League  Unmasked,"   Speech  of  December    15,    1915. 
Congressional  Record, 


THE  AMERICAN  EMPIRE  147 


5.  Patriots 

From  preparedness  to  patriotism  was  an  easy  step.  The 
preparedness  advocates  had  evoked  the  spirit  of  the  foim- 
ders  of  American  democracy  and  worked  upon  the  emo- 
tions of  the  people  until  it  was  generally  understood  that 
those  who  favored  preparedness  were  patriots. 

Plutocratic  patriotism  was  accepted  by  the  press,  the  pul- 
pit, the  college,  and  every  other  important  channel  of  pub- 
lic information  in  the  United  States.  Editors,  ministers, 
professors  and  lawyers  proclaimed  it  as  though  it  were 
their  own.  Randolph  Bourne,  in  a  brilliant  article  {Seven 
Arts,  July,  1917)  reminds  his  readers  of  "the  virtuous 
horror  and  stupefaction  when  they  read  the  manifesto  of 
their  ninety-three  German  colleagues  in  defense  of  the  war. 
To  the  American  academic  mind  of  1914  defense  of  war 
was  inconceivable.  From  Bernhardi  it  recoiled  as  from  a 
blasphemy,  little  dreaming  that  two  years  later  would  find 
it  creating  its  own  cleanly  reasons  for  imposing  military 
service  on  the  country  and  for  talking  of  the  rough  rude 
currents  of  health  and  regeneration  that  war  would  send 
through  the  American  body  politic.  They  would  have 
thought  any  one  mad  who  talked  of  shipping  American, 
men  by  the  hundreds  of  thousands — conscripts — to  die  on 
the  fields  of  France.  ..." 

The  American  plutocracy  was  magnified,  deified,  and  con- 
secrated to  the  task  of  making  the  world  safe  for  democracy. 
Exploiters  had  turned  saviors  and  were  conducting  a  cam- 
paign to  raise  $100,000,000  for  the  Red  Cross.^  The  ' '  male- 
factors of  great  wealth,"  the  predatory  business  forces,  the 
special  privileged  few  who  had  exploited  the  American  peo- 
ple for  generations,  became  the  prophets  and  the  crusaders, 

2  This  campaign  was  conducted  by  H.  P.  Davison,  one  of  the  lead- 
ing members  of  the  firm  of  J.  P.  Morgan  and  Co.  Later  a  great  war- 
fund  drive  was  conducted  by  John  D.  Rockefeller,  Jr.  Cleveland  H. 
Dodge  of  the  Phelps-Dodge  corporation  waa  treasurer  of  another 
fund. 


148  THE  AMERICAN  EMPIRE 


the  keepers  of  the  ark  of  the  covenant  of  American  democ- 
racy. 

Radicals  who  had  always  opposed  war,  ministers  who  had 
spent  their  lives  preaching  peace  upon  earth,  scientists 
whose  work  had  brought  them  into  contact  with  the  peo- 
ples of  the  whole  world,  public  men  who  believed  that  the 
United  States  could  do  greater  and  better  work  for  democ- 
racy by  staying  out  of  the  war,  were  branded  as  traitors 
and  were  persecuted  as  zealously  as  though  they  had  sided 
with  Protestantism  in  Catholic  Spain  under  the  Inquisition. 

By  a  clever  move,  the  plutocrats,  wrapped  in  the  flag  and 
proclaiming  a  crusade  to  inaugurate  democracy  in  Ger- 
many, rallied  to  their  support  the  professional  classes  of 
the  United  States  and  millions  of  the  common  people. 

6.  Business  in  Control 

After  the  declaration  of  war,  the  mobilization  and  direc- 
tion of  the  economic  war  work  of  the  government  was 
placed  in  the  hands  of  the  Council  of  National  Defense,  an 
organized  group  of  the  leading  business  men.  The  Coun- 
cil consisted  of  six  members  of  the  President's  Cabinet, 
assisted  by  an  Advisory  Commission  and  numerous  sub- 
committees. The  "Advisory  Commission"  of  the  Council 
(the  real  working  body)  contained  four  business  men,  an 
educator,  a  labor  leader  and  a  medical  man.  ("The  Coun- 
cil of  National  Defense"  a  bulletin  issued  by  the  Council 
under  date  of  June  28,  1917.) 

Each  member  of  the  Advisory  Commission  had  a  group 
of  persons  cooperating  with  him.  The  make-up  of  these 
various  committees  was  significant.  Among  706  persons 
listed  in  the  original  schedule  of  sub-committees,  404  were 
business  men,  200  were  professional  men,  59  were  labor 
men,  23  were  public  officials  and  20  were  miscellaneous. 
It  was  only  in  Mr.  Gompers'  group  that  labor  had  any 
representation,  and  even  there,  out  of  138  persons  only  59 
were  workers  or  officials  of  unions,  while  34  were  business 


THE  AMERICAN  EMPIRE  149 


men  and  33  professional  men,  so  that  among  Mr.  Gompers' 
assistants  the  business  and  professional  men  combined  con- 
siderably outnumbered  the  labor  men. 

The  make-up  of  some  of  the  sub-committees  revealed  the 
forces  behind  the  Defense  Council.  Thus  Mr.  Willard's 
sub-committee  on  "Express"  consisted  of  four  vice-presi- 
dents, one  from  the  American,  one  from  the  Wells-Fargo, 
one  from  the  Southern  and  one  from  the  Adams  Express 
Company.  His  committee  on  *' Locomotives "  consisted  of 
the  Vice-President  of  the  Porter  Locomotive  Company,  the 
President  of  the  American  Locomotive  Company,  and  the 
Chairman  of  the  Lima  Locomotive  Corporation.  Mr. 
Rosen wald's  committee  on  "Shoe  and  Leather  Industries" 
consisted  of  eight  persons,  all  of  them  representing  shoe 
or  leather  companies.  His  committee  on  "Woolen  Manu- 
factures" consisted  of  eight  representatives  of  the  woolen 
industry.  The  same  business  supremacy  appeared  in  Mr. 
Baruch's  committees.  His  committee  on  "Cement"  con- 
sisted of  the  presidents  of  four  of  the  leading  cement  com- 
panies, the  vice-president  of  a  fifth  cement  company,  and 
a  representative  of  the  Bureau  of  Standards  of  Wash- 
ington. His  committee  on  "Copper"  had  the  names  of 
the  presidents  of  the  Anaconda  Copper  Company,  the  Calu- 
met &  Hecla  Mining  Company,  the  United  Verde  Copper 
Company  and  the  Utah  Copper  Company.  His  committee 
on  "Steel  and  Steel  Products"  consisted  of  Elbert  H.  Gary, 
Chairman  of  the  United  States  Steel  Corporation;  Charles 
M.  Schwab,  of  the  Bethlehem  Steel  Company ;  A.  C.  Dinkey, 
Vice-President  of  the  Midvale  Steel  Company;  W.  L.  King, 
Vice-President  of  Jones  &  Loughlin  Steel  Company,  and 
J.  A.  Burden,  President  of  the  Burden  Steel  Company. 
The  four  other  members  of  the  committee  represented  the 
Republic  Iron  and  Steel  Company,  the  Lackawanna  Steel 
Company,  the  American  Iron  and  Steel  Institute  and  the 
Picklands,  Mather  Co.,  of  Cleveland.  Perhaps  the  most 
astounding  of  all  the  committees  was  that  on  "Oil."  The 
chairman  was  the  President  of  the  Standard  Oil  Company, 
and  the  secretary  of  the  committee  gives  his  address  as 
"26  Broadway,"  the  address  of  the  Standard  Oil  Com- 


150  THE  AMERICAN  EMPIRE 


pany.  The  other  nine  members  of  the  committee  were  oil 
men  from  various  parts  of  the  country.  What  thinking 
American  woukl  have  suggested,  three  years  before,  that 
the  Standard  Oil  Company  would  be  officially  directing  a 
part  of  the  work  of  the  Federal  Government? 

Comment  is  superfluous.  Every  great  industrial  enter- 
prise of  the  United  States  had  secured  representation  on 
the  committees  of  business  men  that  were  responsible  for 
the  direction  of  the  economic  side  of  war  making. 

Then  came  the  Liberty  Loan  campaigns  and  Red  Cross 
drives,  the  direction  of  which  also  was  given  into  the  hands 
of  experienced  business  men.  In  each  community,  the 
leaders  in  the  business  world  were  the  leaders  in  these  war- 
time activities.  Since  the  center  of  business  life  was  the 
bank,  it  followed  that  the  directing  power  in  all  of  the  war- 
time campaigns  rested  with  the  bankers,  and  thus  the  whole 
nation  was  mobilized  under  the  direction  of  its  financiers. 

The  results  of  these  experiences  were  far-reaching.  Dur- 
ing two  generations,  the  people  of  the  United  States  had 
been  passing  anti-trust  laws  and  anti-pooling  laws,  the  aim 
of  which  was  to  prevent  the  business  men  of  the  country 
from  getting  together.  The  war  crisis  not  only  brought 
them  together,  but  when  they  did  assemble,  it  placed  the 
whole  political  and  economic  power  of  the  nation  in  their 
hands. 

The  business  men  learned,  by  first  hand  experience,  the 
benefits  that  arise  from  united  effort.  They  joined  forces 
across  the  continent,  and  they  found  that  it  paid,  James 
S.  Alexander,  President  of  the  National  Bank  of  Com- 
merce (New  York),  tells  the  story  from  the  standpoint  of 
a  banker  {Manchester  Guardian,  January  28,  1920.  Signed 
Article.)  In  g,  discussion  of  "the  experience  in  cooperative 
action  which  the  war  has  given  American  banks"  he  says, 
"The  responsibility  of  floating  the  five  great  loans  issued 
by  the  government,  together  with  the  work  of  financing  a 
production  of  materials  speeded  up  to  meet  war  necessities, 
enforced  a  unity  of  action  and  cooperation  which  otherwise 
could  hardly  have  been  obtained  in  many  years." 


THE  AMERICAN  EMPIRE  151 


7.  Economic  Winnings 

The  war  gains  of  the  plutocracy  in  the  field  of  public 
control  were  important,  as  well  as  spectacular.  Behind 
them,  however,  were  economic  gains — little  heralded,  but 
of  the  most  vital  consequence  to  the  future  of  plutocratic 
power. 

The  war  speeded  production  and  added  greatly  to  the 
national  income,  to  investable  surplus,  to  profits  and  thus 
to  the  economic  power  of  the  plutocrats. 

The  most  tangible  measure  of  the  economic  advantage 
gained  by  the  plutocracy  from  the  war  is  contained  in  a 
report  on  "Corporate  Earnings  and  Government  Rev- 
enues" (Senate  Document  259.  65th  Congress,  Second 
Session).  This  report  shows  the  profits  made  by  the  va- 
rious industries  during  1917 — the  first  war  year. 

The  report  contains  388  large  pages  on  which  are  listed 
the  profits  ("percent  of  net  income  to  capital  stock  in 
1917")  made  by  various  concerns.  A  typical  food  produc- 
ing industry — "meat  packing" — lists  122  firms  (p.  95  and 
365).  Of  these  firms  31  reported  profits  for  the  year  of 
less  than  25  percent;  45  reported  profits  of  25  but  under 
50  percent;  24  reported  profits  of  50  but  under  100  per- 
cent, and  22  reported  profits  of  100  percent  or  more.  In 
this  case,  a  third  of  the  profits  were  more  than  25,  but  less 
than  50  percent,  and  half  were  50  percent  or  over. 

Manufacturers  of  cotton  yarns  reported  profits  ranging 
slightly  higher  than  those  in  the  meat  packing  industry  (pp. 
167,  168,  379).  Among  the  153  firms  reporting,  21  re- 
ported profits  of  less  than  25  percent ;  61  reported  25  but 
less  than  50  per  cent;  55  reported  50  but  under  100  per- 
cent, and  16  reported  100  percent  or  more. 

Profits  in  the  garment  manufacturing  industry  were 
lower  than  those  in  yarn  manufacturing.  Among  the  299 
firms  reporting  (pp.  171,  380)  74  gave  their  profits  as  less 
than  25  percent ;  121  gave  their  profits  as  25  but  under  50 


152  THE  AMERICAN  EMPIRE 


percent;  65  gave  profits  of  50  but  less  than  100  percent, 
and  39  gave  their  profits  as  100  percent  or  over. 

The  profits  of  49  Steel  plants  and  Rolling  Mills  (pp.  100, 
365)  were  considerably  higher  than  profits  in  any  of  the  in- 
dustries heretofore  discussed.  Four  firms  reported  profits  of 
less  than  25  percent ;  13  reported  profits  of  25  but  less  than 
50  percent;  17  reported  profits  of  50  but  less  than  100 
percent,  and  15  reported  profits  of  more  than  100  percent. 
In  this  instance  two-thirds  of  the  firms  show  profits  of  50 
percent  or  over. 

Bituminous  Coal  producers  in  the  Appalachian  field  (340 
in  number,  pp.  130  and  372)  report  a  range  of  profits 
far  higher  than  those  secured  in  the  manufacturing  in- 
dustries. Among  these  340  firms,  23  reported  profits  of 
less  than  25  percent;  45  reported  profits  of  25  but  under 
50  percent;  79  reported  profits  of  50  but  under  100  per- 
cent ;  135  reported  profits  of  100  but  under  500  percent ;  21 
reported  profits  of  500  but  under  1,000  percent,  and  14 
reported  profits  of  1,000  percent  and  over.  In  the  case  of 
these  coal  mine  operators  only  a  fourth  had  profits  of  un- 
der 50  percent  and  half  had  profits  of  more  than  100  per- 
cent. 

The  profits  in  these  five  industries — food,  yam,  cloth- 
ing, steel  and  coal — are  quite  typical  of  the  figures  for  the 
tens  of  thousands  of  other  firms  listed  in  Senate  Docu- 
ment 259.  Profits  of  less  than  25  percent  are  the  excep- 
tion. Profits  of  over  100  percent  were  reported  by  8  per- 
oent  of  the  yarn  manufacturers,  by  13  percent  of  the  gar- 
ment manufacturers,  by  18  percent  of  the  meat  packers,  by 
31  percent  of  the  steel  plants,  and  by  50  percent  of  the 
bituminous  coal  mines.  A  considerable  number  of  profits 
ranged  above  500  percent,  or  a  gain  in  one  year  of  five 
times  the  entire  capital  stock. 

When  it  is  remembered  that  these  figures  were  supplied 
by  the  firms  involved ;  that  they  were  submitted  to  a  tre- 
mendously overworked  department,  lacking  the  facilities 
for  effective  checking-up ;  and  that  they  were  submitted  for 
the  purposes  of  heavy  taxation,  the  showing  is  nothing  lesa 
than  astounding. 


THE  AMERICAN  EMPIRE  153 


8.  Winnings  in  the  Home  Field 

"What  has  the  American  plutocracy  won  at  home  as  a 
result  of  the  war?  In  two  words  it  has  gained  social 
prestige  and  internal  (economic)  solidarity.  Both  are  vital 
as  the  foundation  for  future  assertions  of  power. 

The  plutocracy  has  unified  its  hold  upon  the  country  as 
a  result  of  the  war.  Also,  it  has  won  an  important  battle 
in  its  struggle  with  labor.  The  position  held  by  the  Ameri- 
can plutocracy  at  the  end  of  the  Great  War  could  hardly 
be  stated  more  adequately  than  in  a  recent  Confidential 
Information  Service  furnished  by  an  important  agency  to 
American  business  men : 

"Shall  Victors  Be  Magnanimous? 

"There  is  no  doubt  about  it — Labor  is  beaten.  Mr. 
Gompers  was  at  his  zenith  in  1918.  Since  then  he  has 
steadily  lost  power.  He  has  lost  power  with  his  own  peo- 
ple because  he  is  no  longer  able  to  deliver  the  goods.  He 
can  no  longer  deliver  the  goods  for  two  reasons.  For  one 
thing,  peace  urgency  has  replaced  war  urgency  and  we  are 
not  willing  to  bid  for  peace  labor  as  we  were  willing  to  bid 
for  war  labor.  For  another  thing,  the  employing  class  is 
immensely  more  powerful  than  it  was  in  1914. 

"We  have  an  organized  labor  force  more  numerous  than 
ever  before.  Relatively  twice  as  many  workers  are  organ- 
ized as  in  1916.  But  this  same  labor  force  has  lost  its  hold 
on  the  public.  Furthermore,  it  is  divided  in  its  own  camp. 
It  fears  capital.  It  also  fears  its  own  factions.  It  threat- 
ens, but  it  does  not  dare. 

"We  said  that  the  employing  class  was  immensely  more 
powerful  than  in  1914.  There  is  more  money  at  its  com- 
mand. Eighteen  thousand  new  millionaires  are  the  war's 
legacy.  This  money  capacity  is  more  thoroughly  unified 
than  ever.  In  1914  we  had  thirty-thousand  banks,  func- 
tioning to  a  great  degree  in  independence  of  each  other. 
Then  came  the  Federal  Reserve  Act  and  gave  us  the  ma- 


154  THE  AMEEICAN  EMPIRE 


chinery  for  consolidation  and  the  emergency  of  five  years 
war  furnished  the  hammer  blows  to  weld  the  structure  into 
one. 

''The  war  taught  the  employing  class  the  secret  and  the 
power  of  widespread  propaganda.  Imperial  Europe  had 
been  aware  of  this  power.  It  was  new  to  the  United  States. 
Now,  when  we  have  anything  to  sell  to  the  American  peo- 
ple we  know  how  to  sell  it.  We  have  learned.  We  have 
the  schools.  We  have  the  pulpit.  The  employing  class 
owns  the  press.  There  is  practically  no  important  paper 
in  the  United  States  but  is  theirs ! ' ' 


9.  The  Run  of  the  World 

The  war  gains  of  the  American  plutocracy  at  home  were 
immense.  Even  more  significant,  from  an  imperial  stand- 
point, were  the  international  advantages  that  came  to 
America  with  the  war.  The  events  of  the  two  years  be- 
tween 1916  and  1918  gave  the  United  States  the  run  of  the 
world. 

Destiny  seemed  to  be  bent  upon  hurling  the  American 
people  into  a  position  of  world  authority.  First,  there  was 
the  matter  of  credit.  The  Allies  were  reaching  the  end 
of  their  economic  rope  when  the  United  States  entered  the 
war.  They  were  not  bankrupt,  but  their  credit  was 
strained,  their  industries  were  disorganized,  their  sources 
of  income  were  narrowed,  and  they  were  looking  anxiously 
for  some  source  from  which  they  might  draw  the  immense 
volume  of  goods  and  credit  that  were  necessary  for  the  con- 
tinuance of  the  struggle.^ 


3  J.  Maynard  Keynes  notes  the  "immense  anxieties  and  impossible 
financial  requirements"  of  the  period  between  the  Summer  of  1916 
and  the  Spring  of  1917.  The  task  would  soon  have  liccome  "en- 
tirely hopeless"  but  "from  April,  1917"  the  problems  were  "of  an 
entirely  different  order."  "Tlie  Economic  Consequences  of  the  Peace." 
New  York,  Harcourt,  Brace  &  Howe,  1920,  p.  273. 


THE  AMERICAN  E]\IPIRE  155 


The  United  States  was  that  source  of  supply.  During 
the  years  from  1915  to  1917,  the  industries  of  the  United 
States  were  shifted  gradually  from  a  peace  basis  to  a  war 
basis.  Quantities  of  material  destined  for  use  in  the  war 
were  shipped  to  the  Allies.  The  unusual  profits  made  on 
much  of  this  business  were  not  curtailed  by  heavy  war  taxa- 
tion. Thus  for  more  than  two  years  the  basic  industries 
of  the  United  States  reaped  a  harvest  in  profits  which  were 
actually  free  of  taxation,  at  the  same  time  that  they  placed 
themselves  on  a  war  basis  for  the  supplying  of  Europe's 
war  demand.  "When  the  United  States  did  enter  the  war, 
she  came  with  all  of  the  economic  advantages  that  had 
arisen  from  selling  war  material  to  the  belligerents  during 
two  and  a  half  years.  Throughout  those  years,  while  the 
Allies  were  bleeding  and  borrowing  and  paying,  the  Ameri- 
can plutocracy  was  growing  rich. 

When  the  United  States  entered  the  war,  she  entered  it 
as  an  ally  of  powers  that  were  economically  winded.  She 
herself  was  fresh.  "With  the  greatest  estimated  wealth  of 
any  of  the  warring  countries,  she  had  a  public  national 
debt  of  less  than  one  half  of  one  percent  of  her  total  wealth. 
She  had  larger  quantities  of  liquid  capital  and  a  vast  eco- 
nomic surplus.  As  a  consequence,  she  held  the  purse 
strings  and  was  able,  during  the  next  two  years,  to  lend  to 
the  Allied  nations  nearly  ten  billion  dollars  without  strain- 
ing her  resources  to  any  appreciable  degree. 

The  nations  of  Europe  had  been  so  deeply  engrossed  in 
war-making  that  they  had  been  unable  to  provide  themselves 
with  the  necessary  food.  All  of  the  warring  countrier., 
with  the  exception  of  Russia,  were  importers  of  food  in 
normal  times.  The  disturbances  incident  to  the  war;  the 
insatiable  army  demands,  and  the  loss  of  shipping  all  had 
their  effect  in  bringing  the  Allied  countries  to  a  point  of 
critical  food  scarcity  in  the  Winter  of  1916-1917. 

The  United  States  was  able  to  meet  this  food  shortage 
as  easily  as  it  met  the  European  credit  shortage — and  with 
no  greater  sacrifice  on  the  part  of  the  American  people. 
Then,  too,  with  the  exception  of  small  amounts  of  food 


156  THE  AMERICAN  EMPIRE 


donated  through  relief  organizations,  the  food  that  went  to 
Europe  was  sold  at  fancy  prices.  The  United  States  was 
therefore  in  a  position  to  lay  down  the  basic  law, — ' '  Submit 
or  starve. ' ' 

With  the  purse  strings  and  the  larder  under  American 
control,  the  temporary  supremacy  of  the  United  States  was 
assured.  She  was  the  one  important  nation  (beside  Japan) 
that  had  lost  little  and  gained  much  during  the  war.  She 
was  the  only  great  nation  witH  a  surplus  of  credit,  of  raw 
materials  and  of  food. 

The  prosperity  incident  to  this  period  is  reflected  in  the 
record  of  American  exports,  which  rose  from  an  average  of 
about  two  billions  in  the  years  immediately  preceding  the 
war  to  more  than  six  billions  in  1917.  In  the  same  year 
the  imports  were  just  under  three  billions,  leaving  a  trade 
balance — that  is,  a  debt  owing  by  foreign  countries  to  the 
United  States — of  more  than  three  billions  for  that  one 
year. 

10.  Victory 

The  war  had  been  in  progress  for  nearly  three  years  be- 
fore the  United  States  took  her  stand  on  the  side  of  the 
Allies.  At  that  time  the  flower  of  Europe's  manhood  had 
faced,  for  three  winters,  a  fearful  pressure  of  hardship 
and  exposure,  while  millions  among  the  non-combatants 
had  suffered,  starved,  sickened  and  died.  The  nerves  of 
Europe  were  worn  and  the  belly  of  Europe  was  empty  when 
the  American  soldiers  entered  the  trenches.  They  were 
never  compelled  to  bear  the  brunt  of  the  conflict.  They 
arrived  when  the  Central  Empires  were  sagging.  Their 
mere  presence  was  the  tokeix  of  victory. 

For  the  first  time  in  history  the  Americans  were  matched 
against  the  peoples  of  the  old  world  on  the  home  ground 
of  the  old  world,  and  under  circumstances  that  were 
enormously  favorable  to  the  Americans.  European  capi- 
talism had  weakened  itself  irreparably.     The  United  States 


THE  AMERICAN  EMPIRE  157 


entered  the  war  at  a  juncture  that  enabled  her  to  take  the 
palm  after  she  had  already  taken  billions  of  profit  without 
risk  or  loss.  The  gain  to  the  United  States  was  immense, 
beyond  the  possibility  of  present  estimate.  The  rulers  of 
the  United  States  became,  for  the  time  being,  at  least,  the 
economic  dictators  of  the  world. 

The  Great  War  brought  noteworthy  advantages  to  the 
American  plutocracy.  At  home  its  power  was  clinched. 
Among  the  nations,  the  United  States  was  elevated  by  the 
war  into  a  position  of  commanding  importance.  In  a 
superficial  sense,  at  least,  the  Great  War  "made"  the  plu- 
tocracy at  home  and  "made"  the  United  States  among  the 
nations. 


158  THE  AMERICAN  EMPIRE 

XII.     THE  IMPERIAL  HIGHROAD 
1.  A  Youthful  Traveler 

Along  the  highroad  that  leads  to  empire  moves  the 
American  people,  in  the  heyday  of  its  youth,  sturdy, 
vigorous,  energy-filled,  replete  with  power  and  promise — 
conquerors  who  have  swept  aside  the  Indians,  enslaved  a 
race  of  black  men,  subdued  a  continent,  and  begun  the  ex- 
tension of  territorial  control  beyond  their  own  borders. 
More  than  a  hundred  million  Americans — fast  losing  their 
standards  of  individualism — fast  slipping  under  the  domina- 
tion of  a  new-made  ruling  class  of  wealth-lords  and  pluto- 
crats— journey,  not  discontentedly,  along  the  imperial 
highroad. 

The  preliminary  work  of  empire-building  has  been  ac- 
complished— territory  has  been  conquered;  peoples  have 
been  subjected  and  a  ruling  class  organized.  The  policy 
of  imperialism  has  been  accepted  by  the  people,  although 
they  have  not  thought  seriously  of  its  consequences.  They 
have  set  out,  in  good  faith,  as  they  believe,  to  seek  for  life, 
liberty  and  happiness.  They  do  not  yet  realize  that,  along 
the  road  that  they  are  now  traveling,  the  journey  will  not 
be  ended  until  they  have  worn  themselves  threadbare  in 
their  efforts  to  conquer  the  earth. 

The  American  people, — lacking  in  political  experience 
and  in  world  wisdom ;  ignorant  of  the  laws  of  economic  and 
social  change, — have  committed  themselves,  unwittingly,  to 
the  world  old  task  of  setting  up  authority  over  those  who 
have  no  desire  to  accept  it,  and  of  exacting  tribute  from 
those  who  do  not  wish  to  pay  it. 

The  early  stages  of  the  journey  led  across  a  continent. 
The  American  people  followed  it  eagerly.  Now  that  the 
trail  leads  to  other  continents  they  are  still  willing  to  go. 


THE  AMERICAN  EMPIRE  159 


** Manifest  destiny"  is  the  cry  of  the  leaders.  ""We  are 
called,"  echo  the  followers,  and  the  nation  moves  onward. 

There  was  some  hesitancy  among  the  American  people 
during  the  Spanish  War.  Even  the  leaders  were  not  ready 
then.  Now  the  leaders  are  prepared — for  markets,  for 
trade,  for  investments.  They  are  indifferent  to  political 
conquest,  but  economically  they  are  prepared  to  go  on — 
into  Latin  America;  into  Asia;  into  Europe.  The  war 
taught  them  the  lesson  and  gave  them  an  inkling  of  their 
power.  So  they  move  along  the  imperial  highroad — 
followed  by  a  people  who  have  not  yet  learned  to  chant  the 
songs  of  victory — but  who  are  destined,  at  no  very  distant 
date,  to  learn  victory's  lessons  and  to  pay  victory's  price. 
Along  tlie  path, — far  away  in  the  distance  they  see  the 
earth  like  a  ball,  rolling  at  their  feet.  It  is  theirs  if  they 
will  but  reach  out  their  hands  to  grasp  it ! 


2.  An  Imperial  People 

This  is  the  American  people — locked  in  the  arms  of 
mighty  economic  and  social  forces ;  building  industrial  em- 
pires; compelled,  by  a  world  war,  to  reach  out  and  save 
* '  civilization, ' ' — capitalist  civilization, — a  people  that,  by  its 
very  ancestry,  seems  destined  to  follow  the  course  of 
empire. 

The  sons  and  daughters  of  the  native  bom  American 
stock  are,  in  the  main,  the  descendants  of  the  conquering, 
imperial  races  of  the  modern  world.  During  recent  times, 
three  great  empires — Spain,  France  and  Great  Britain — 
have  dominated  western  civilization.  It  was  these  three 
empires  that  were  responsible  for  the  settlement  of  America. 
The  past  generation  has  seen  the  German  empire  rise  to  a 
position  that  has  enabled  her  to  shake  the  security  of  the 
T/orld,  The  Germans  were  among  the  earliest  and  most 
numerous  settlers  of  the  American  colonies.  Those  who 
boast  colonial  ancestry  boast  the  ancestry  of  conquerors. 
The  Anglo-Saxon-Teutonic  races,  the  titular  masters  of  the 


160  THE  AMERICAN  EMPIRE 


modem  world ;  the  races  that  have  spread  their  power  vv'here- 
ever  ships  sail  or  trade  moves  or  gain  offers,  fumishsd  the 
bulk  of  the  early  immigrants  to  America. 

The  bulk  of  the  early  immigration  to  the  United  States  was 
from  Great  Britain  and  Germany.  The  records  of  im- 
migration (kept  officially  since  1820)  show  that  between 
that  year  and  1840  the  immigrants  from  Europe  num- 
bered 594,504,  among  them  there  were  358,994  (over 
half)  from  the  British  Isles,  and  159,215  from  Ger- 
many, making  a  total  from  the  two  countries  of  518,209,  or 
87  percent  of  the  immigrants  arriving  in  the  twenty-year 
period.  During  the  next  twenty  years  (1840-1860)  the 
total  of  immigrants  from  Europe  was  4,050,159,  of  which 
the  British  Isles  furnished  2,386,846  (over  half)  and  Ger- 
many 1,386,293,  making,  for  these  two  countries,  94  percent 
of  the  whole  immigration.  Even  during  the  years  from 
1860  to  1880,  82  percent  of  those  who  migrated  to  the 
United  States  hailed  from  Great  Britain  and  Germany. 
American  immigration,  from  1820  to  1880,  might,  without 
any  violence  to  facts,  be  described  as  Anglo-Teutonic,  so 
completely  does  the  British-German  immigrant  dominate 
this  period. 

Literally,  it  is  true  that  the  American  people  have  been 
sired  by  the  masters  and  would-be  masters  of  the  modem 
earth. 

3.  A  Place  in  the  Sun 

The  Americans,  like  many  another  growing  people,  have 
sought  a  place  in  the  sun — widening  their  boundaries; 
grasping  at  promised  riches.  Unlike  other  peoples  they 
have  accomplished  the  task  without  any  real  opposition. 
Their  "promised  land"  lay  all  about  them,  isolated  from 
the  factional  warfare  of  Europe;  virgin;  awaiting  the 
master  of  the  Western  World. 

The  United  States  has  followed  the  path  of  empire  with 
a  facility  unexampled  in  recent  history.  When  has  a  people, 
caught  in  the  net  of  imperialism,  cncoimtcred  less  difficulty 


THE  AMERICAN  EMPIRE  161 


in  making  its  imperial  dream  come  true  ?  None  of  the  foes 
that  the  American  people  have  encountered,  in  two  centuries 
of  expansion,  have  been  worthy  of  the  name.  The  Indians 
were  in  no  position  to  withstand  the  onslaught  of  the 
"Whites.  The  Mexicans  were  even  less  competent  to  defend 
themselves.  The  Spanish  Empire  crumpled,  under  attack, 
like  an  autumn  leaf  under  the  heel  of  a  hunter.  Practically 
for  the  taking,  the  American  people  secured  a  richly-stocked, 
compact  region,  with  an  area  of  three  millions  of  square 
miles — the  ideal  site  for  the  foundation  of  a  modern  civili- 
zation. 

The  area  of  the  United  States  has  increased  with  mar- 
velous rapidity.  At  the  outbreak  of  the  Revolution  (1776) 
the  Colonies  claimed  a  territory  of  369,000  square  miles. 
The  Northwest  Territory  (275,000  square  miles)  and  the 
area  south  of  the  Ohio  River  (205,000  square  miles)  were 
added  largely  as  a  result  of  the  negotiations  in  1782.  The 
official  figures  for  1800  give  the  total  area  of  the  United 
States  as  892,135  square  miles.  The  Louisiana  Purchase 
(1803)  added  885,000  square  miles  at  a  cost  of  15  millions 
of  dollars.  Florida,  59,600  square  miles,  was  purchased 
from  Spain  (1819)  for  5  millions  of  dollars;  Texas,  389,000 
square  miles  was  annexed  in  1845;  the  Oregon  Country, 
285,000  square  miles,  was  secured  by  treaty  in  1846 ;  New 
Mexico  and  California,  529,000  square  miles,  were  ceded  by 
Spain  (1848)  and  a  payment  of  15  millions  was  made  by  the 
United  States ;  in  1853  the  Gadsen  Purchase  added  30,000 
square  miles  at  a  cost  of  ten  millions  of  dollars.  This  com- 
pleted the  territorial  possessions  of  the  United  States  on  the 
mainland  (with  the  exception  of  Alaska)  making  a  conti- 
nental area  of  3,026,798  square  miles.  Between  1776  and 
1853  the  area  of  the  United  States  was  increased  more  than 
eight  fold.  What  other  nation  has  been  in  a  position  to 
multiply  its  home  territory  by  eight  in  two  generations? 

These  vast  additions  to  the  continental  possessions  of  the 
United  States  were  made  as  the  result  of  a  trifling  outlay. 
The  most  serious  losses  were  involved  in  the  Mexican  War 
when  the  casualties  included  more  than  13,000  killed  and 


162  THE  AMERICAN  EMPIRE 


died  of  wounds  and  disease.  The  net  money  cost  of  the 
war  did  not  exceed  $100,000,000.  In  return  for  this  outlay 
— including  the  annexation  of  Texas — the  United  States 
secured  918,000  square  miles  of  land.^ 

There  is  no  way  to  estimate  the  loss  of  life  or  the  money 
cost  of  the  Indian  Wars.  For  the  most  part,  the  troops 
engaged  in  them  suffered  no  more  heavily  than  in  ordinary 
police  duty,  and  the  costs  were  the  costs  of  maintaining 
the  regular  army.  The  total  money  outlay  for  purchases 
and  indemnities  was  about  45  millions  of  dollars.  "Within 
a  century  the  American  people  gained  possession  of  one  of 
the  richest  portions  of  the  earth's  surfaces — a  portion 
equal  in  area  to  more  than  three  times  the  combined  acreage 
of  Belgium,  France,  Germany,  Italy,  Japan  and  the  British 
Isles  ^ — in  return  for  an  outlay  in  money  and  life  that  would 
not  have  provided  for  one  first  class  battle  of  the  Great 
War. 

Additions  to  the  territory  of  the  country  were  made  with 
equal  facility  during  the  period  following  the  Civil  War. 
Alaska  was  purchased  from  Russia  for  $7,200,000;  from 
Spain,  as  a  result  of  the  War  of  1898,  the  United  States 
received  the  Philippines,  Porto  Rico,  and  some  lesser  is- 
lands, at  the  same  time  paying  Spain  $20,000,000 ;  Hawaii 
was  annexed  and  an  indemnity  of  $10,000,000  was  paid  to 
Panama  for  the  Canal  strip.  During  the  second  half  of 
the  nineteenth  century,  716,666  square  miles  were  added 
to  the  possessions  of  the  United  States.  The  total  direct 
cost  of  this  territory  in  money  was  under  forty  millions. 
These  gains  involved  no  casualties  with  the  exception  of 
the  small  numbers  lost  during  the  Spanish-American  and 
Philippine  Wars. 

One  hundred  and  thirty  years  have  witnessed  an  addi- 
tion to  the  United  States  of  more  than  two  and  a  half  mil- 
lion square  miles  of  contiguous,  continental  territory,  and 

1  "New  American  History,"  A.  B.  Hart.  American  Book  Co.,  1917, 
p.  348. 

2  Tlie  total  area  of  these  countries,  exclusive  of  their  colonies,  ia 
807,123  square  miles. 


THE  AMERICAN  EMPIRE  163 

three-quarters  of  a  million  square  miles  of  non-contiguous 
territory.  The  area  of  the  United  States  in  1900  was  four 
times  as  great  as  it  v/as  in  ISOO  and  more  than  ten  times 
as  great  as  the  area  of  the  Thirteen  Original  Colonies.  For 
the  imperialist,  the  last  century  and  a  half  of  American 
history  is  a  fairyland  come  true. 

Other  empires  have  been  won  by  the  hardest  kind  of 
fighting,  during  which  blood  and  wealth  have  been  spent 
with  a  lavish  hand.  The  empire  of  the  French,  finally 
crushed  with  the  defeat  of  Napoleon,  was  paid  for  at  such 
a  huge  price.  The  British  Empire  has  been  established  in 
savage  competition  with  Holland,  Spain,  France,  Russia, 
the  United  States,  Germany  and  a  host  of  lesser  powers. 
The  empires  of  old — Assyria,  Egypt,  Rome — were  built  at 
an  intolerable  sacrifice.  So  terrible  has  been  the  cost  of 
empire  building  to  some  of  these  nations  that  by  the  time 
they  had  succeeded  in  creating  an  empire  the  life  blood 
of  the  people  and  the  resources  of  the  country  were  de- 
voured and  the  empire  emerged,  only  to  fall  an  easy  prey 
to  the  first  strong-handed  enemy  that  it  encountered. 

No  such  fate  has  overtaken  the  United  States.  On  the 
contrary  her  path  has  been  smoothed  before  her  feet.  In- 
habiting a  garden  spot,  her  immense  territory  gains  in  the 
past  hundred  and  fifty  years  have  been  made  with  less  ef- 
fort than  it  has  cost  Japan  to  gain  and  hold  Korea  or  Eng- 
land to  maintain  her  dominion  over  Ireland. 

Once  established,  the  old-world  empire  was  not  secure. 
If  the  territory  that  it  possessed  was  worth  having,  it  was 
surrounded  by  hungry-eyed  nations  that  took  the  first  oc- 
casion to  band  together  and  despoil  the  spoiler.  The  hold- 
ing of  an  empire  was  as  great  a  task  as  the  building  of 
empire — often  greater  because  of  the  larger  outlay  in  men 
and  money  that  was  involved  in  an  incessant  warfare. 
Little  by  little  the  glory  faded;  step  by  step  militarism 
made  its  inroads  upon  the  normal  life  of  the  people,  until 
the  time  came  for  the  stronger  rival  to  overthrow  the  mighty 
one,  or  until  the  inrushing  hordes  of  barbarians  should  blot 


164  THE  AMERICAN  EMPIRE 


out  the  features  of  civilization,  and  enthrone  chaos  once 
more. 

How  different  has  been  the  fate  of  the  people  of  the 
United  States !  Possessed  of  what  is  probably  the  richest, 
for  the  purposes  of  the  present  civilization,  of  any  terri- 
tory of  equal  size  in  the  world,  their  isolation  has  allowed 
them  more  than  a  century  of  practical  freedom  from  out- 
side interference — a  century  that  they  have  been  able  to 
devote  to  internal  development.  The  absence  of  greedy 
neighbors  has  reduced  the  expense  of  military  preparation 
to  a  minimum;  the  old  world  has  failed  to  realize,  until 
within  the  last  few  years,  what  were  the  possibilities  of  the 
new  country ;  vitality  has  remained  unimpaired,  wealth  has 
piled  up,  industiy  has  been  promoted,  and  on  each  occasion 
when  a  greater  extent  of  territory  was  required,  it  has  been 
obtained  at  a  cost  that,  compared  with  the  experience  of 
other  nations,  must  be  described  as  negligible. 

So  simple  has  been  the  process  of  empire  building  for 
the  United  States ;  so  natural  have  been  the  stages  by  whicli 
the  American  Empire  has  been  evolved ;  so  little  have  the 
changes  disturbed  the  routine  of  normal  life  that  the  Amer- 
ican people  are,  for  the  most  part,  unaware  of  the  imperial 
position  of  their  country.  They  still  feel,  think  and  talk 
as  if  the  United  States  were  a  tiny  corner,  fenced  off  from 
the  rest  of  the  world  to  which  it  owed  nothing  and  from 
which  it  expected  nothing. 

The  American  Empire  has  been  built,  as  were  the  pal- 
aces of  Aladdin,  in  a  night.  The  morning  is  dawning,  and 
the  early  risers  v/ho  were  not  even  awakened  from  their 
f^lumbers  by  the  sound  of  hammer  and  engine,  are  begin- 
ning to  rub  their  eyes,  and  to  ask  one  another  what  is  the 
meaning  of  this  apparition,  and  v/hether  it  is  real. 

4.  The  Will  to  Poiver 

The  forces  of  America  are  the  forces  of  Empire, — the 
geography,  the  economic  organization,  the  racial  qualities — 
all  press  in  the  direction  of  imperialism.     There  is  logic 


THE  AMERICAN  EMPIRE  165 


behind  the  two  centuries  of  conquest  in  which  the  Ameri- 
can people  have  been  engaged;  there  is  logic  in  the  rise 
of  the  plutocracy.  Now  it  remains  for  the  rulers  of  Amer- 
ica to  accept  the  implications  of  imperialism, — to  thrill  with 
the  will  to  power;  to  recognize  and  strengthen  imperial  pur- 
pose ;  to  sell  imperialism  to  the  American  people — in  other 
words  to  follow  the  call  of  manifest  destiny  and  conquer 
the  earth. 

The  will  to  power  is  very  old  and  very  strong.  Eco- 
nomic and  social  necessity  on  the  one  hand,  and  the  driving 
pressure  of  human  ambition  and  the  love  of  domination  on 
the  other,  have  given  it  a  front  place  in  human  affairs.  The 
empires  of  the  psst  were  driven  into  being  by  this  ardent 
force.  As  far  back  as  history  bears  a  record,  one  nation 
or  tribe  has  made  war  on  its  more  fortunately  situated 
neighbor;  one  leader  has  made  cause  against  his  fellow 
ruler.  The  Egyptians  and  Carthaginians  have  conquered 
in  Africa;  the  Persians,  Assyrians  and  Babylonians  con- 
quered in  Asia;  the  Macedonians,  Greeks,  Romans,  Span- 
ish, Dutch,  French,  and  British  built  their  empires  on  one 
or  more  of  the  five  continents.  Conqueror  has  succeeded 
conqueror,  empire  has  followed  empire.  Spoils,  domination, 
world  power,  have  been  the  objects  of  their  campaigns. 

Each  great  nation  grew  from  small  beginnings.  Each 
arose  from  some  simple  form  of  tribal  or  clan  organiza- 
tion— more  or  less  democratic  in  its  structure ;  containing 
within  itself  a  unified  life  and  a  simple  folk  philosophy. 

From  such  plain  beginnings  empires  have  developed. 
Tlie  peasants,  tending  their  fertile  gardens  along  the  bor- 
ders of  the  Nile ;  the  vine  dressers  of  Italy,  the  husbandmen 
and  craftsmen  of  France  and  the  yeomen  of  Merry  Eng- 
land had  no  desire  to  subjugate  the  world.  If  tradition 
speaks  truth,  they  were  slow  to  take  upon  themselves  any- 
thing more  than  the  defense  of  their  own  hearthstones.  It 
was  not  until  the  traders  sailed  across  the  seas ;  not  until 
stories  were  brought  to  them  of  the  vast  spoil  to  be  had, 
without  work,  in  other  lands,  that  the  peasants  and  crafts- 
men consented  to  undertake  the  task  of  conquest,  subjuga- 
tion and  emnire  building. 


166  THE  AMERICAN  EMPIRE 


The  plain  people  do  not  feel  the  will  to  power.  They 
Know  only  the  necessities  of  self-defense.  It  is  in  the  am- 
bitions of  the  leisure  classes  that  the  demands  of  conquest 
have  their  origin.  It  is  among  them  that  men  dream  of 
world  empire.^ 

The  plain  people  of  the  United  States  have  no  will  to 
power  at  the  present  time.  They  are  only  asking  to  be 
let  alone,  in  order  that  they  may  go  their  several  ways  in 
peace.  They  are  babes  in  the  world  of  international  poli- 
tics. For  generations  they  have  been  separated  by  a  great 
gulf  of  indifference  from  the  remainder  of  the  human  race, 
and  they  crave  the  continuance  of  this  isolation  because  it 
gives  them  a  chance  to  engage,  unmolested,  in  the  ordinary 
pursuits  of  life. 

The  American  people  are  not  imperialists.  They  are 
proud  of  their  country,  jealous  of  her  honor,  willing  to 
make  sacrifices  for  their  dear  ones.  They  are  to-day  where 
the  plain  folk  of  Egypt,  Rome,  France  and  England  were 
before  the  will  to  power  gripped  the  ruling  classes  of  those 
countries. 

Far  different  is  the  position  of  the  American  plutocracy. 
As  a  ruling  class  the  plutocracy  feels  the  necessity  of  pre- 
serving and  enlarging  its  privileges.  Recently  called  into 
a  position  of  leadership,  untrained  and  in  a  sense  unpre- 
pared, it  nevertheless  understands  that  its  claim  to  con- 
sideration depends  upon  its  ability  to  do  what  the  ruling 
classes  of  Egypt,  Rome,  France  and  England  have  done — ■ 
to  build  an  empire. 

Almost  unconsciously,  out  of  the  necessities  of  the  period, 
has  come  the  structure  of  the  American  Empire.  In  es- 
sence it  is  an  empire,  although  the  plain  people  do  not 
know  it,  and  even  the  members  of  the  plutocracy  are  in 
many  instances  unaware  of  its  true  character.  Yet  here,  in 
a  land  dedicated  to  liberty  and  settled  by  men  and  women 
who  sought  to  escape  from  the  savage  struggles  of  empirc- 


3  Soe  "Tlieory  of  the  Ijeisure  Class,"  Thorstoin  Veblen.     New  York, 
Hucbsch,  1918,  Ch.  10. 


THE  AMERICAN  EMPIRE  167 


ridden  Europe,  the  foundations  and  the  superstructure  of 
empire  appear. 

1.  The  people  of  the  United  States  have  conquered  and 
now  hold  possession  of  approximately  three  million  square 
miles  of  continental  territory  that  has  been  won  by  armed 
force  from  Great  Britain,  Mexico,  Spain,  and  the  American 
Indians.  (The  entire  area  of  Europe  is  only  3,800,000 
square  miles.) 

2.  The  people  of  the  United  States  have  conquered  and 
now  hold  under  their  sway  subject  people  who  have  en- 
joyed no  opportunity  for  self-determination.  A  whole 
race — the  African  Negroes — was  captured  in  its  native 
land,  transported  to  America  and  there  sold  into  slavery. 
The  inhabitants  of  the  Philippine  Islands  were  conquered 
by  the  armed  forces  of  the  United  States  and  still  are  sub- 
ject people. 

3.  The  United  States  had  developed  a  plutocracy — a 
property  holding  class,  that  is,  to  all  intents  and  purposes, 
the  imperialist  class — controlling  and  directing  public 
policy. 

4.  This  plutocratic  class  is  exploiting  continental  United 
States  and  its  dependencies.  After  years  of  savage  internal 
strife,  it  has  developed  a  high  degree  of  class  conscious- 
ness, and  led  by  its  bankers,  it  is  taking  the  fat  of  the  land. 
The  plutocrats,  who  have  made  the  country  their  United 
States,  are  at  the  present  moment  busy  disposing  of  their 
surplus  in  foreign  countries.  As  they  build  their  indus- 
trial empires,  they  broaden  and  deepen  their  power. 

Thus  is  the  round  of  imperialism  complete.  Here  are 
the  conquered  territory,  subject  people,  an  imperial  rul- 
ing class,  and  the  exploitation,  by  this  class,  of  the  lands 
and  peoples  that  come  within  the  scope  of  their  power. 
These  are  the  attributes  of  empire — the  characteristics  that 
have  appeared,  in  one  form  or  another,  through  the  great 
empires  of  the  past  and  of  the  present  day.  Differing  in 
their  forms,  they  remain  similar  in  the  principles  that  they 
represent.     They  are  imperialism. 


168  THE  AMERICAN  EMPIRE 


5.  Imperial  Purpose 

The  building  of  international  industrial  empires  by  the 
progressive  business  men  of  the  United  States  lays  the 
foundation  for  whatever  political  imperialism  is  necessary 
to  protect  markets,  trade  and  investment.  Gathering  floodj; 
of  economic  surplus  are  the  driving  forces  which  are  guided 
by  ambition  and  love  of  gain  and  power. 

The  United  States  emerged  from  the  Great  War  in  a 
position  of  unquestioned  economic  supremacy.  "With  vast 
stores  of  all  the  necessary  resources,  amply  equipped  with 
capital,  the  country  has  entered  the  field  as  the  most  dan- 
gerous rival  that  the  other  capitalist  nations  must  face. 
Possessed  of  everything,  including  the  means  of  providing 
a  navy  of  any  reasonable  size  and  an  army  of  any  necessary 
number,  the  United  States  looms  as  the  dominating  eco- 
nomic factor  in  the  capitalist  world. 

Imperial  policy  is  frequently  bold,  rough  and  at  times 
frankly  brutal  and  unjust.  Where  subject  peoples  and 
weaker  neighbors  submit  to  the  dictates  of  the  ruling  power 
there  is  no  friction.  But  where  the  subject  peoples  or 
smaller  states  attempt  to  assert  their  rights  of  self- 
determination  or  of  independence,  the  empire  acts  as  Great 
Britain  has  acted  in  Ireland  and  in  India;  as  Italy  and 
France  have  acted  in  Africa;  as  Japan  has  acted  in  Korea; 
as  the  United  States  has  acted  in  the  Philippines,  in  Hayli, 
in  Nicaragua,  and  in  Mexico. 

Plain  men  do  not  like  these  things.  Animated  by  the 
belief  in  popular  rights  which  is  so  prevalent  among  the 
western  peoples,  the  masses  resent  imperial  atrocities. 
Therefore  it  becomes  necessary  to  surround  imperial  action 
with  such  an  atmosphere  as  will  convince  the  man  on  the 
street  that  the  acts  are  necessary  or  else  that  they  are  in- 
evitable. 

Wlien  the  Church  and  the  State  stood  together  tlie  Czar 
and  the  Kaiser  spoke  for  God  as  well  as  for  the  financial 
interests.     There  v/as  thus  a  double  sanction — imperial  ne- 


THE  AMERICAN  EMPIRE  169 


cessity  coupled  with  divine  authority.  Those  who  were  not 
willing  to  accept  the  necessity  felt  enough  reverence  for 
the  authority  to  bow  their  heads  in  submission  to  what- 
ever policy  the  masters  of  empire  might  inaugurate. 

The  course  of  empire  upon  which  the  United  States  has 
embarked  involves  a  complete  departure  from  all  of  the 
most  cherished  traditions  of  the  American  people.  Eco- 
nomic, political  and  social  theories  must  all  be  thrust  aside. 
Liberty,  equality  and  fraternity  must  all  be  forgotten  and 
in  their  places  must  be  erected  new  standards  of  imperial 
purpose  that  are  acceptable  to  the  economic  and  political 
masters  of  present  day  American  life. 

The  American  people  have  been  taught  the  language  of 
liberty.  They  believe  in  freedom  for  self-determination. 
Their  own  government  was  born  as  a  protest  against  im- 
perial tyranny  and  they  glory  in  its  origin  and  speak 
proudly  of  its  revolutionary  background.  Americans  are 
still  individualists.  Their  lives  and  thoughts  both  have 
been  provincial — perhaps  somewhat  narrow.  They  profess 
the  doctrine  **Live  and  let  live"  and  in  a  large  measure 
they  are  willing  and  anxious  to  practice  it. 

How  is  it  possible  to  harmonize  the  Declaration  of  In- 
dependence with  the  subjugation  of  peoples  and  the  con- 
quest of  territory?  If  governments  "derive  their  just 
powers  from  the  consent  of  the  governed,"  and  if  it  is  the 
right  of  a  people  to  alter  or  to  abolish  any  government 
which  does  not  insure  their  safety  and  happiness,  then 
manifestly  subjugation  and  conquest  are  impossible. 

The  letter  and  the  spirit  of  the  Declaration  of  Inde- 
pendence contradict  the  letter  and  spirit  of  imperial  pur- 
pose word  for  word  and  line  for  line.  There  can  be  no 
harmony  between  these  two  theories  of  social  life. 

5.  Advertising  Imperialism 

Since  the  tradition  of  the  people  of  the  United  States 
and  the  necessities  of  imperialism  are  so  utterly  at  variance, 
it  becomes  necessary  to  convince  the  American  people  that 


170  THE  AMERICAN  EMPIRE 


they  should  abandon  their  traditions  and  accept  a  new 
order  of  society,  under  which  the  will  to  power  shall  be 
substituted  for  liberty  and  fraternity.  The  ruling  class 
of  imperial  Germany  did  this  frankly  and  in  so  many 
words.     The  English  speaking  world  is  more  adroit. 

The  first  step  in  the  campaign  to  advertise  and  justify 
imperialism  is  the  teaching  of  a  blind  my-country-right-or- 
wrong  patriotism.  In  the  days  preceding  the  war  the  idea 
was  expressed  in  the  phrase, ' '  Stand  behind  the  President. ' ' 
The  object  of  this  teaching  is  to  instill  in  the  minds  of  the 
people,  and  particularly  of  the  young,  the  principles  of 
"Deutschland  iiber  alles,"  which,  in  translation,  means 
"America  first."  There  are  more  than  twenty  million 
children  in  the  public  schools  of  the  United  States  who  are 
receiving  daily  lessons  in  this  first  principle  of  popular 
support  for  imperial  policy. 

Having  taken  this  first  step  and  made  the  state  supreme 
over  the  individual  will  and  conscience,  the  imperial  class 
makes  its  next  move — for  "national  defense."  The  coun- 
try is  made  to  appear  in  constant  danger  from  attack. 
Men  are  urged  to  protect  their  homes  and  their  families. 
They  are  persuaded  that  the  white  dove  of  peace  cannot 
rest  securely  on  anything  less  than  a  great  navy  and  army 
large  enough  to  hold  off  aggressors.  The  same  forces  that 
are  most  eager  to  preach  patriotism  are  the  most  anxious 
about  national  preparedness. 

Meanwhile  the  plain  people  are  taught  to  regard  them- 
selves and  their  civilization  as  superior  to  anything  else 
on  earth.  Those  who  have  a  different  language  or  a  dif- 
ferent color  are  referred  to  as  "inferior  peoples."  The 
people  of  Panama  cannot  dig  a  canal,  the  people  of  Cuba 
cannot  drive  out  yellow  fever,  the  people  of  the  Philippines 
cannot  run  a  successful  educational  system,  but  the  people 
of  the  United  States  can  do  all  of  these  things, — therefore 
they  are  justified  in  interferring  in  the  internal  affairs  of 
Panama,  Cuba  and  the  Philippines.  When  there  is  a 
threat  of  trouble  with  Mexico,  the  papers  refer  to  "clean- 
ing up  Mexico"  very  much  as  a  mother  might  refer  to  clean- 
ing up  a  dirty  child. 


THE  AMERICAN  EMPIRE  171 


Patriotism,  preparedness  and  a  sense  of  general  superior- 
ity lead  to  that  type  of  international  snobbery  that  says, 
"Our  flag  is  on  the  seven  seas";  or  "The  sun  never  sets 
on  our  possessions";  or  "Our  navy  can  lick  anything  on 
earth."  The  preliminary  work  of  "Education"  has  now 
been  done ;  the  way  has  been  prepared. 

One  more  step  must  be  taken,  and  the  process  of  im- 
perializing  public  opinion  is  complete.  The  people  are  told 
that  the  imperialism  to  which  they  have  been  called  is  the 
work  of  ' '  manifest  destiny. ' ' 

7.  Manifest  Destiny 

The  argument  of  "manifest  destiny"  is  employed  by  the 
strong  as  a  blanket  justification  for  acts  of  aggression 
against  the  weak.  Each  time  that  the  United  States  has 
come  face  to  face  with  the  necessity  of  adding  to  its  terri- 
tory at  the  expense  of  some  weak  neighbor,  the  advocates 
of  expansion  have  plied  this  argument  with  vigor  and  with 
uniform  success. 

The  American  nation  began  its  work  of  territorial  ex- 
pansion with  the  purchase  of  Louisiana.  Jefferson,  who 
had  been  elected  on  a  platform  of  strict  construction  of  the 
Constitution,  hesitated  at  an  act  which  he  regarded  as 
"beyond  the  Constitution."  (Jefferson's  "Works,"  Vol. 
IV,  p.  198.)  Quite  different  was  the  language  of  his  more 
imperialistic  contemporaries.  Gouvemeur  Morris  said, 
*  *  France  will  not  sell  this  territory.  If  we  want  it,  we  must 
adopt  the  Spartan  policy  and  obtain  it  by  steel,  not  by 
gold."*  During  February,  1803,  the  United  States  Sen- 
ate debated  the  closing  of  the  Mississippi  to  American  com- 
merce. "To  the  free  navigation  of  the  Mississippi  we  had 
an  undoubted  right  from  nature  and  from  the  position  of 
the  "Western  country,"  ^  said  Senator  Ross  (Pennsylvania) 

4  "A  History  of  Missouri,"  Louis  Houck.  Chicago,  R.  R.  Donnelly 
&  Sons,  1908,  vol.  II,  p.  346. 

5  "History  of  Louisiana,"  Charles  Gayarre.  New  Orleans,  Hansel! 
&  Bros.,  Ltd.,  1903,  vol.  Ill,  p.  478. 


t 


172  THE  AMERICAN  EMPIRE 


on  Februarj'- 14.  On  February  23rd  Senator  White  (Dela- 
ware) went  a  step  farther:  "You  had  as  well  pretend  to 
dam  up  the  mouth  of  the  Mississippi,  and  say  to  the  rest- 
less waves,  *Ye  shall  cease  here,  and  never  mingle  with  the 
ocean,'  as  to  expect  they  (the  settlers)  will  be  prevented 
from  descending  it. "  ^  On  the  same  day  (February  23rd) 
Senator  Jackson  (Georgia)  said:  "God  and  nature  have 
destined  New  Orleans  and  the  Floridas  to  belong  to  this 
great  and  rising  Empire. ' ' ' 

God,  nature  and  the  requirements  of  American  commerce 
were  the  arguments  used  to  justify  the  purchase,  or  if 
necessary,  the  seizure  of  New  Orleans.  The  precedent  has 
been  followed  and  the  same  arguments  presented  all 
through  the  century  that  followed  the  momentous  decision 
to  extend  the  territory  of  the  United  States. 

Some  reference  has  been  made  to  the  Mexican  War  and 
the  argument  that  the  Southwest  was  a  "natural"  part  of 
the  territory  of  the  United  States,  The  same  argument 
was  made  in  regard  to  Cuba  and  by  the  same  spokesmen 
of  the  slave-power.  Stephen  A.  Douglas  (New  Orleans, 
December  13,  1858)  was  asked: 

"How  about  Cuba?" 

"It  is  our  destiny  to  have  Cuba,"  he  answered,  "and 
you  can't  prevent  it  if  you  try."  ^ 

On  another  occasion  (New  York,  December,  1858)  Doug- 
las stated  the  matter  even  more  broadly : 

"This  is  a  young,  vigorous  and  growing  nation  and  must 
obey  the  law  of  increase,  must  multiply  and  as  fast  as  we 
multiply  we  must  expand.  You  can 't  resist  the  law  if  you 
try.  He  is  foolish  who  puts  himself  in  the  way  of  Ameri- 
can destiny. ' '  ^ 

President  McKinley  stated  that  the  Philippines,  like 
Cuba  and  Porto  Rico,  ' '  were  intrusted  to  our  hands  by  the 


6  Ibid.,  p.  485. 

7  Ibid.,  p.  486. 

s  McMastor's  "Ilistoiy  of  the  American  People."     Vol.  VIII,  p.  339. 
» Ibid.,  p.  339. 


THE  AMEEICAN  EMPIRE  173 


Providence  of  God"  (Boston,  February  16,  1S99),  and  one 
of  his  fellow  imperialists — Senator  Beveridge  of  Indiana — 
carried  the  argument  one  step  farther  (January  9,  1900) 
when  he  said  in  the  Senate  {Congressional  Record,  January 
9,  1900,  p.  704)  :  "The  Philippines  are  ours  forever.  .  .  . 
And  just  beyond  the  Philippines  are  China's  illimitable 
markets.  "We  will  not  retreat  from  either.  "We  will  not 
repudiate  our  duty  to  the  archipelago.  "Wo  will  not  aban- 
don our  opportunity  in  the  Orient.  We  will  not  renounce 
our  part  in  the  mission  of  our  race,  trustee,  under  God,  of 
the  civilization  of  the  world." 

Manifest  destiny  is  now  urged  to  justify  further  acts 
of  aggression  by  the  United  States  against  her  v/eaker  neigh- 
bors. The  Chicago  Tribune,  discussing  the  Panama  Canal 
and  its  implications,  says  editorially  (May  5,  1916)  :  "The 
Panama  Canal  has  gone  a  long  way  towards  making  our 
shore  continuous  and  the  intervals  must  and  will  be  filled 
up;  not  necessarily  by  conquest  or  even  formal  annexa- 
tion, but  by  a  decisive  control  in  one  form  or  another." 

Here  the  argument  of  manifest  destiny  is  backed  by  the 
argument  of  "military  necessity," — the  argument  that  led 
Great  Britain  to  possess  herself  of  Gibraltar,  Suez  and  a 
score  of  other  strategic  points  all  round  the  earth,  and  to 
maintain,  at  a  ruinous  cost,  a  huge  navy;  the  argument 
that  led  Napoleon  across  Europe  in  his  march  of  bloody, 
fatal  triumph;  the  argument  that  led  Germany  through 
Belgium  in  1914 — one  of  the  weakest  and  yet  one  of  the 
most  seductive  and  compelling  arguments  that  falls  from 
the  tongue  of  man.  Because  we  have  a  western  and  an 
eastern  front,  we  must  have  the  Panama  Canal.  Because 
we  have  the  Panama  Canal,  we  must  dominate  Central 
America.  The  next  step  is  equally  plain ;  because  we  dom- 
inate Central  America  and  the  Panama  Canal,  there  must 
be  a  land  route  straight  through  to  the  Canal.  In  the 
present  state  of  Mexican  unrest,  that  is  impossible,  and 
therefore  we  must  dominate  Mexico. 

The  argument  was  stated  with  persuasive  power  by  ex- 
Senator  Albert  J.  Beveridge   {Collier's  Weekly,  May  19, 


174  THE  AMERICAN  EMPIRE 


1917).  "Thus  in  hcalting  fashion  but  nevertheless  surely, 
the  chain  of  power  and  influence  is  being  forged  about  the 
Gulf.  To  neglect  Mexico  is  to  throw  away  not  only  one  link 
but  a  large  part  of  that  chain  without  which  the  value  and 
usefulness  of  the  remainder  ai*e  greatly  diminished  if  indeed 
not  rendered  negligible."  By  a  similar  train  of  logic,  the 
entire  American  continent,  from  Cape  Horn  to  Bering 
Sea  can  and  will  be  brought  under  the  dominion  of  the 
United  States. 

Some  destiny  must  call,  some  imperative  necessity  must 
beckon,  some  divine  authority  must  be  invoked.  The  cam- 
paign for  "100  percent  Americanism,"  carefully  thought 
out,  generously  financed  and  carried  to  every  nook  and 
corner  of  the  United  States  aims  to  prove  this  necessity. 
The  war  waged  by  the  Department  of  Justice  and  by  other 
public  officers  against  the  "Reds"  is  intended  to  arouse  in 
the  American  people  a  sense  of  the  present  danger  of  im- 
pending calamity.  The  divine  sanction  was  expressed  by 
President  Wilson  in  his  address  to  the  Senate  on  July  10, 
1919.  The  President  discussed  the  Peace  Treaty  in  some  of 
its  aspects  and  then  said,  "It  is  thus  that  a  new  responsi- 
bility has  come  to  this  great  nation  that  we  honor  and  that 
we  would  all  wish  to  lift  to  yet  higher  service  and  achieve- 
ment. The  stage  is  set,  the  destiny  disclosed.  It  has  come 
about  by  no  plan  of  our  conceiving  but  by  the  hand  of  God 
who  has  led  us  into  this  war.  We  cannot  turn  back.  We 
can  only  go  forward,  with  lifted  and  freshened  spirit  to 
follow  the  vision. ' ' 

8.  Tlie  Open  Road 

The  American  people  took  a  long  step  forward  on  Novem- 
ber 2,  1920.  The  era  of  modem  imperialism,  begun  in  1896 
by  the  election  of  McKinley,  found  its  expression  in  the 
annexation  of  Hawaii ;  the  conquest  of  Cuba  and  the  Philip- 
pines ;  the  seizure  of  Panama,  and  a  rapid  commerical  and 
financial  expansion  into  Latin  America.  In  1912  the  Re- 
publicans were  divided.  The  more  conservative  elements 
backed  Taft  for  reelection.     The  more  aggressive  group 


THE  AMERICAN  EMPIRE  175 


(notably  United  States  Steel)  supported  Roosevelt.  Be- 
tween them  they  divided  the  Republican  strength,  and  while 
they  polled  a  total  vote  of  7,604,463  as  compared  with  Wil- 
son's 6,293,910,  the  Republican  split  enabled  Wilson  to 
secure  a  plurality  of  2,173,512,  although  he  had  less  than 
half  of  the  total  vote. 

President  Wilson  entered  office  with  the  ideals  of 
"The  New  Freedom."  He  was  out  to  back  the  "man 
on  the  make,"  the  small  tradesman  and  manufacturer; 
the  small  farmer;  the  worker,  ambitious  to  rise  into 
the  ranks  of  business  or  professional  life.  With  the  sup- 
port, primarily,  of  little  business,  Wilson  managed  to  hold 
his  own  for  four  years,  and  at  the  1916  election  to  poll 
a  plurality,  over  the  Republican  Party,  of  more  than  half 
a  million  votes.  He  won,  however,  primarily  because  "he 
kept  us  out  of  war."  April,  1917,  deprived  him  of  that 
argument.  His  "New  Freedom"  doctrines,  translated  into 
international  politics  (in  the  Fourteen  Points)  were  roughly 
handled  in  Paris.  The  country  rejected  his  leadership  in 
the  decisive  Congressional  elections  of  1918,  and  he  and  his 
party  went  out  of  power  in  the  avalanche  of  1920,  when 
Harding  received  a  plurality  nearly  tliree  times  as  great 
as  the  highest  one  ever  before  given  a  presidential  candi- 
date (Roosevelt,  in  1904).  Every  state  north  of  the  Mason 
and  Dixon  Line  went  Republican.  Tennessee  left  the  Solid 
South  and  joined  the  same  party.  The  Democrats  carried 
only  eleven  states — the  traditional  Democratic  stronghold. 

The  victory  of  Harding  is  a  victory  for  organized,  im- 
perial, American  business.  The  "man  on  the  make"  is 
brushed  aside.  In  his  place  stands  banker,  manufacturer 
and  trader,  ready  to  carry  American  money  and  American 
products  into  Latin  America  and  Asia. 

Before  the  United  States  lies  the  open  road  of  imperial- 
ism. Manifest  destiny  points  the  way  in  gestures  that  can- 
not be  mistaken.  Capitalist  society  in  the  United  States  has 
evolved  to  a  place  where  it  must  make  certain  pressing  de- 
mands upon  neighboring  communities.  Surplus  is  to  be 
invested ;  investments  are  to  be  protected,  American  author- 


176  THE  AMERICAN  EMPIRE 


ity  is  to  be  respected.  All  of  these  necessities  imply  the 
exercise  of  imperial  power  by  the  government  of  the  United 
States. 

Capitalism  makes  these  demands  upon  the  rulers  of  capi- 
talist society.  There  is  no  gainsaying  them.  A  refusal  to 
comply  with  them  means  death. 

Therefore  the  American  nation,  under  the  urge  of  eco- 
nomic necessity ;  guided  half-intelligently,  half-instinctively 
by  the  plutocracy,  is  moving  along  the  imperial  highroad, 
and  woe  to  the  man  that  steps  across  the  path  that  leads 
to  their  fulfillment.  He  who  seeks  to  thwart  imperial  des- 
tiny will  be  branded  as  traitor  to  his  country  and  as  blas- 
phemer against  God. 


THE  AMERICAN  EMPIRE  177 


XIII.     THE  UNITED  STATES  AS  A  WORLD 
COMPETITOR 

1.  A  New  World  Power 

Youngest  among  the  great  nations,  the  United  States 
holds  a  position  of  immense  world  power.  Measured  in 
years  and  compared  with  her  sister  nations  in  Europe  and 
Asia,  she  is  a  babe.  Measured  in  economic  strength  she  is 
a  burly  giant.  Young  America  is,  but  mighty  with  a  vast 
economic  strength. 

An  inexorable  destiny  seems  to  be  forcing  the  United 
States  into  a  position  of  international  importance.  Up  to 
the  time  of  the  Spanish  War,  she  played  only  a  minor  part 
in  the  affairs  of  the  world.  The  Spanish  War  was  the 
turning  point — the  United  States  as  a  borrowing  nation 
gave  way  then,  to  the  United  States  as  an  investing  nation 
Economic  forces  compelled  the  masters  of  economic  life  tc 
look  outside  of  the  country  for  some  of  their  business  oppor- 
tunities. 

Since  the  Civil  War  the  United  States  has  been  preparing 
herself  for  her  part  in  world  affairs.  During  the  thirty 
years  that  elapsed  between  1870  and  1900  she  emerged  from 
a  position  of  comparative  economic  inferiority  to  take  a 
position  of  notable  economic  importance.  Between  the 
years  1870  and  1900  the  population  of  the  United  States 
increased  97  per  cent.  During  the  same  period  the  annual 
production  of  wheat  increased  from  236  million  bushels 
to  522  million  bushels ;  the  annual  production  of  com  from 
1,094  to  2,105  million  bushels ;  the  annual  production  of  cot- 
ton from  4,352  to  10,102  thousand  bales;  the  annual  pro- 
duction of  coal  from  29  to  241  million  tons;  the  annual 
production  of  petroleum  from  221  to  2,672  million  gallons ; 
the  annual  production  of  pig  iron  from  1,665  to  13,789 
thousand  tons;  the  annual  production  of  steel  from  68  to 


178  THE  AMERICAN  EMPIRE 


10,188  thousand  tons;  the  annual  production  of  copper 
from  12  to  271  thousand  tons,  and  the  production  of  cement 
(there  is  no  record  for  1870)  rose  from  two  million  barrels 
in  1880  to  17  million  barrels  in  1900.  Thus  while  the  pro- 
duction of  food  more  than  kept  pace  with  the  increiise  of 
population,  the  production  of  those  commodities  upon  which 
the  new  industry  depends — coal,  petroleum,  iron,  steel, 
copper  and  cement — increased  many  times  more  rapidly 
than  the  population.  During  one  brief  generation  the 
United  States,  with  almost  unbelievable  rapidity,  forged 
ahead  in  the  essentials  for  supremacy  in  the  new  world  of 
industry. 

By  the  time  of  the  Spanish  "War  (1898)  American  indus- 
tries had  found  their  stride.  During  the  next  fourteen 
years  they  were  overtaking  their  European  competitors  in 
seven  league  boots.  Between  1900  and  1914  while  the  popu- 
lation of  the  United  States  increased  by  30  per  cent, — 

Wheat  production  increased 70  per  cent 

Corn  production  increased. .  .v. . . .  27 

Cotton  production  increased 58 

Poal  production  increased 90 

Petroleum  production  increased. .  317 

Pig  Iron  production  increased. . .  69 

Steel  production  increased 131 

Copper  production  increased....  89 

Cement  production  increased 406 

The  United  States  was  rushing  toward  a  position  of  eco- 
nomic world  power  before  the  catastrophe  of  1914  hurled 
her  to  the  front,  first  as  a  producer  (at  immense  profits) 
for  the  Allies,  and  later  as  the  financier  of  the  final  stagos 
of  the  "War. 

The  economic  position  that  is  now  held  by  the  United 
States  among  the  great  competing  nations  of  the  world 
can  be  in  some  measure  suggested — it  cannot  be  adequately 
F.tated — by  a  comparison  of  the  economic  position  of  the 
United  States  and  some  of  the  other  leading  world  empires. 


THE  AMERICAN  EMPIRE  179 


Neither  the  geographical  area  of  the  United  States  nor 
the  numerical  importance  of  its  people  justifies  its  present 
world  position.  The  country,  with  8  per  cent  of  the  area 
and  6  per  cent  of  the  population  of  the  world,  looms  large 
in  the  world 's  economic  affairs, — how  large  will  appear  from 
an  examination  of  certain  features  that  are  considered 
essential  to  economic  success,  such  as  resources,  capital, 
products,  shipping,  and  national  wealth  and  income. 

2.  The  Resources  of  the  United  States 

The  most  important  resource  of  any  country  is  the  fertile, 
agricultural  land.  Figures  given  in  the  Department  of 
Agriculture  Year  Book  for  1918  (Table  319)  show  the 
amount  of  productive  land, — including,  beside  cultivated 
land,  natural  meadows,  pastures,  forests,  woodlots,  etc.,  of 
the  various  countries  according  to  pre-war  boundary  lines. 
The  total  of  such  productive  land  for  the  36  leading  coun- 
tries of  the  world  was  4,591.7  million  acres.  Russia,  in- 
cluding Siberia,  had  almost  a  third  of  this  total  (1,414.7 
million  acres).  The  United  States  came  second  with  878.8 
million  acres,  or  19  per  cent  of  the  total  available  produc- 
tive land.  Third  in  the  list  was  Argentine  with  537.8  mil- 
lion acres.  British  India  came  fourth  with  465.7  million 
acres.  Then  there  followed  in  order  Austria-Hungary, 
Germany,  France,  Australia,  Spain  and  Japan.  Austria- 
Hungary,  Germany  and  France  combined  had  almost  ex- 
actly four  hundred  million  acres  of  productive  land  or  less 
than  half  the  productive  area  of  the  United  States. 

The  United  States,  in  the  area  of  productive  land,  is 
second  only  to  Russia.  In  the  area  of  land  actually  un- 
der cultivation,  however,  it  stands  first,  with  Russia  a 
close  second  and  British  India  a  close  third, — the  amounts 
of  cultivated  land  in  each  of  these  countries  being  293.8 
million  acres,  279.6  million  acres,  and  264.9  million  acres 
respectively.  These  three  countries  together  contain  64  per 
cent  of  the  1,313.8  million  acres  of  cultivated  land  of  the 
world.  The  United  States  alone  contains  22  per  cent  of  the 
total  cultivated  land. 


180  THE  AMERICAN  EMPIRE 


The  total  forest  acreage  available  for  commercial  purposes 
is  greatest  in  Russia  (728.4  million  acres).  The  United 
States  stands  second  with  400  million  acres  and  Canada 
third  with  341  million  acres.  The  Chief  of  Forest  Investi- 
gations of  the  United  States  Department  of  Agriculture 
(Letter  of  Oct.  11,  1919)  places  the  total  forest  acreage  of 
both  Brazil  and  (Canada  ahead  of  the  United  States.  In 
the  case  of  Brazil  no  figures  are  available  showing  what 
portion  of  the  988  million  acres  of  total  area  is  commer- 
cially available.  Canada  with  a  total  forest  acreage  of  800 
miUion  acres  has  less  timber  commercially  available  than 
the  United  States  with  a  total  forest  area  of  500  million 
acres. 

The  iron  ore  reserves  of  the  world  are  estimated  at  91,000 
million  tons  ("Iron  Ores,"  Edwin  C.  Eckel.  McGraw  Ilill 
Book  Co.,  1914,  pp.  392-3).  Of  this  amount  51,000  millions 
are  placed  in  Asia  and  Africa;  12,000  million  tons  in 
Europe,  and  14,800  million  tons  in  North  America.  The 
United  States  alone  is  credited  with  4,260  million  tons  or 
about  5  per  cent  of  the  world 's  supply.  The  United  States 
Geological  Survey  {Bulletin  666v)  estimates  the  supply  of 
the  United  States  at  7,550  million  tons ;  the  supply  in  New- 
foundland, Mexico  and  Cuba  as  7,000  million  tons,  and  that 
in  South  America  as  8,000  million  tons  as  against  12,000 
million  tons  for  Europe.  This  estimate  would  give  the 
United  States  alone  8  per  cent  of  the  iron  ore  of  the  world. 
It  would  give  North  America  15  per  cent  and  the  Western 
Hemisphere  25  per  cent,  as  against  15  per  cent  for  Europe. 

Iron  ore  furnishes  the  material  out  of  which  industrir;l 
civilization  is  constructed.  Until  recently  the  source  of  in- 
dustrial power  has  been  coal.  Even  to-day  petroleum  and 
water  play  a  relatively  unimportant  role.  Coal  still  holds 
the  field. 

The  United  States  alone  contains  3,838,657  million  tons — 
more  than  half  of  the  total  coal  reserves  of  the  world. 
("  Coal  Resources  of  the  World. ' '  Compiled  by  the  Execu- 
tive Committee,  International  Geological  Congress,  1913, 
Vol.   I,  p.  XVIII  ff.)     North  America  is  credited  with 


THE  AMERICAN  EMPIRE  181 


5,073,431  million  tons  or  over  two-thirds  of  the  world's  total 
coal  reserves  (7,397,553  millions  of  tons).  The  coal  reserve 
of  Europe  is  784,190  million  tons  or  about  one-fifth  of  the 
coal  reserves  of  the  United  States  alone. 

Figures  showing  the  amount  of  productive  land  and  of 
timber  may  be  verified.  Those  dealing  with  iron  ore  and 
coal  in  the  ground  are  mere  estimates  and  should  be  treated 
as  such.  At  the  same  time  they  give  a  rough  idea  of  the 
economic  situation.  Of  all  the  essential  resources, — land, 
timber,  iron,  copper,  coal,  petroleum  and  water-power, — the 
United  States  has  large  supplies.  As  compared  with  Eu- 
rope, her  supply  of  most  of  them  is  enormous.  No  other 
single  country  (the  British  Empire  is  not  a  single  country) 
that  is  now  competing  for  the  supremacy  of  the  world  can 
compare  with  the  United  States  in  this  regard,  and  if  North 
America  be  taken  as  the  unit  of  discussion,  its  preponder- 
ance is  enormous. 


3,  The  Capital  of  the  United  States 

The  United  States  apparently  enjoys  a  large  superiority 
over  any  single  country  in  its  reserves  of  some  of  the  most 
essential  resources.  The  same  thing  is  true  of  productive 
machinery. 

Figures  showing  the  actual  quantities  of  capital  are  avail- 
able in  only  a  small  number  of  cases.  Estimates  of  capi- 
tal value  in  terms  of  money  are  useless.  It  is  only  the 
figures  which  show  numbers  of  machines  that  really  give 
a  basis  for  judging  actual  differences. 

Live  stock  on  farms,  the  chief  form  of  agricultural  capi- 
tal, is  reported  for  the  various  countries  in  the  Year  Book 
of  the  United  States  Department  of  Agriculture.  The 
United  States  (1916)  heads  the  list  with  61.9  million  cattle; 
67.8  million  hogs;  48.6  million  sheep  and  goats,  and  25.8 
million  horses  and  mules, — 204  million  farm  animals  in  all. 
The  Russian  Empire  (including  Russia  in  Asia)  is  second 
(1914)  with  52.0  million  cattle ;  15.0  hogs ;  72.0  million  sheep 


182  THE  AMERICAN  EMPIRE 

and  goats,  and  34.9  horses  and  mules, — 174  million  farm 
animals  in  all.  British  India  (1914)  reports  more  cattle 
than  any  other  country  (140.5  million)  ;  she  is  also  second 
in  the  number  of  sheep  and  goats  with  64.7  millions,  but  she 
has  no  hogs  and  1.9  million  horses.  Argentina  (1914)  re- 
ports 29.5  million  cattle;  2.9  million  sheep  and  goats;  and 
8.9  million  horses  and  mules.  The  number  of  animals  on 
European  farms  outside  of  Russia  is  comparatively  small. 
Germany  (1914),  United  Kingdom  (1916),  Austria-Hun- 
gary (1913),  and  France  (1916)  reported  61.8  million 
cattle,  46.6  million  hogs,  60.8  million  sheep  and  goats,  and 
11.5  million  horses  and  mules,  making  a  total  of  180.7  mil- 
lion farm  animals.  These  four  countries  with  a  population 
of  about  206  million  persons,  had  less  live  stock  than  the 
United  States  with  its  population  (1916)  of  about  100  mil- 
lions. 

It  would  be  interesting  to  compare  the  amount  of  farm 
machinery  and  farm  equipment  of  the  United  States  with 
that  of  other  countries.  Unfortunately  no  such  figures  are 
available. 

The  figures  showing  transportation  capital  are  fairly 
complete.  {Statistical  Ahstr.  1918,  pp.  844-5.)  The  total 
railroad  mileage  of  the  world  is  729,845.  More  than  one- 
third  of  this  mileage  (266,381  miles)  is  in  the  United  States. 
Russia  (1916)  comes  second  with  48,950  miles;  Germany 
(1914)  third,  with  38,600  miles  and  Canada  (1916)  fourth 
with  37,437  miles. 

The  world's  total  mileage  of  telegraph  wire  (Ibid.)  is 
5,816,219,  of  which  the  United  States  has  more  than  a  fourth 
(1,627,342  miles).  Russia  (1916)  is  second  with  537,208 
miles;  Germany  (1914)  is  third  with  475,551  miles;  and 
France  fourth  with  452,192  miles. 

The  Bureau  of  Railway  Economics  has  published  a  com- 
pilation on  "Comparative  Railway  Statistics"  (Bulletin 
100,  "Washington,  1916)  from  which  it  appears  that  the 
United  States  is  far  ahead  of  any  other  country  in  its  rail- 
road equipment.  The  total  number  of  locomotives  in  the 
United  States  was  64,760;  in  Germany  29,520;  in  United 


THE  AMERICAN  EMPIRE  183 

Kingdom  24,718;  in  Russia  (1910)  19,984;  and  in  France 
13,828.  No  other  country  in  the  world  had  as  many  as  ten 
thousand  locomotives.  If  these  figures  also  showed  the 
locomotive  tonnage  as  well  as  the  number,  the  lead  of  the 
United  States  would  be  even  more  decided  as  the  European 
locomotives  are  generally  smaller  than  those  used  in  the 
United  States.  This  fact  is  clearly  brought  out  by  the  fig- 
ures from  the  same  bulletin  showing  freight  car  tonnage 
(total  carrying  capacity  of  all  cars) .  For  the  United  States 
the  tonnage  was  (1913)  86,978,145.  The  tonnage  of  Ger- 
many was  10.7  million ;  of  France  5.0  millions ;  of  Austria- 
Hungary  3.8  millions.  The  figures  for  the  United  Kingdom 
were  not  available. 

The  United  States  also  takes  the  lead  in  postal  equip- 
ment. {Stat.  Alstr.,  1918,  pp.  844-5.)  There  are  324,869 
post  offices  in  the  world ;  54,257  or  one-sixth  in  the  United 
States.  The  postal  routes  of  the  world  cover  2,513,997 
miles,  of  which  450,954  miles  are  in  the  United  States.  The 
total  miles  of  mail  service  for  the  world  is  2,061  millions. 
Of  this  number  tlie  United  States  has  601.3  millions. 

The  most  extreme  contrast  between  transportation  capital 
in  the  United  States  and  foreign  countries  is  furnished  by 
the  number  of  automobiles.  Facts  and  Figures,  the  official 
organ  of  the  National  Automobile  Chamber  of  Commerce 
(April,  1919)  estimates  the  total  number  of  cars  in  use 
on  January  1,  1917  as  4,219,246.  Of  this  number  almost 
six-sevenths  (3,500,000)  were  in  use  in  the  United  States. 
The  total  number  of  cars  in  Europe  as  estimated  by  the 
Fiat  Press  Bureau,  Italy,  was  437,558,  or  less  than  one- 
seventh  of  the  number  in  use  in  the  United  States.  Auto- 
mobile distribution  is  of  peculiar  significance  because  the 
industry  has  developed  almost  entirely  since  the  Spanish- 
American  War  and  therefore  since  the  time  when  the  United 
States  first  began  to  develop  into  a  world  power. 

The  world's  cotton  spindleage  in  1919  is  estimated  at 
149.4  million  spindles.  (Letter  from  T.  H.  Price  10/6/19.) 
Of  this  total  Great  Britain  has  57.0  millions;  the  United 
States  33.7  millions ;  Germany  11,0  millions ;  Russia  8.0  mil- 
lions, and  France  and  India  each  7.0  millions. 


184  THE  AMERICAN  EMPIRE 


No  effort  has  been  made  to  cite  figures  showing  the  esti- 
mated value  of  various  fonns  of  capital,  because  of  the 
necessary  variations  in  value  standards.  Enough  material 
showing  actual  quantities  of  capital  has  been  presented  to 
prove  that  in  agriculture,  in  transportation,  in  certain  lines 
of  manufacturing  the  United  States  is  either  at  the  head  of 
the  list,  or  else  stands  in  second  place.  In  transportation 
capital  (particularly  autom,obiles)  the  lead  of  the  United 
States  is  very  great. 

If  figures  were  available  to  show  the  relative  amounts  of 
capital  used  in  mining,  in  merchandising,  and  in  financial 
transactions  they  would  probably  show  an  equally  great 
advantage  in  favor  of  the  United  States.  In  this  connection 
it  might  not  be  irrelevant  to  note  that  in  1915  the  total 
stock  of  gold  money  in  the  world  was  8,258  millions  of  dol- 
lars. More  than  a  quarter  (2,299  millions)  was  in  the 
United  States.  The  total  stock  of  silver  money  was  2,441 
millions  of  dollars  of  which  756  millions  (nearly  a  third) 
wiis  in  the  United  States.     (Stat.  Ahstr.,  1918,  pp.  840-1.) 


4.  Products  of  the  United  States 

Figures  showing  the  amounts  of  the  principal  commodi- 
ties produced  in  the  United  States  are  far  more  complete 
than  those  covering  the  resources  and  capital.  They  are 
perhaps  the  best  index  of  the  present  economic  position  of 
the  United  States  in  relation  to  the  other  countries  of  the 
world. 

The  wheat  crop  of  the  world  in  1916  was  3,701.3  million 
bushels.  Russia,  including  Siberia,  was  the  leading  pro- 
ducer with  686.3  million  bushels.  The  United  States  was 
second  with  636.7  million  bushels  or  17  per  cent  of  the 
world's  output.  British  India,  the  third  wheat  producer, 
had  a  crop  in  1916  of  323.0  million  bushels.  Canada,  with 
262.8  million  bushels,  was  fourth  on  the  list.  Thus  Canada 
and  the  United  States  combined  produced  almost  exactly 
one-fourth  of  the  world's  wheat  crop. 


THE  AMERICAN  EMPIRE  185 


As  a  producer  of  corn  the  United  States  is  without  a  peer. 
The  world's  corn  crop  in  1916  Avas  3,642.1  million  bushels. 
Two-thirds  of  this  crop  (2,566.9  million  bushels)  was  pro- 
duced in  the  United  States. 

The  position  of  the  United  States  els  a  producer  of  com 
is  almost  duplicated  in  the  case  of  cotton.  The  Statistical 
Abstract  published  by  the  British  Government  (No.  39, 
London,  1914,  p.  522)  gives  the  world's  cotton  production 
as  21,659,000  bales  (1912).  Of  this  number  the  United 
States  produced  14,313,000 — almost  exactly  two-thirds. 
British  India,  which  ranks  second,  reported  a  production  of 
3,203,000  bales.     Egypt  was  third  with  1,471,000  bales. 

About  one-tenth  of  the  world 's  output  of  wool  is  produced 
in  the  United  States,  ^orld  production  for  1917  is  placed 
at  2,790,000  pounds.  {Bulletin,  National  Association  of 
Wool  Manufacturers.  1918,  p.  162.)  Australia  heads  the 
list  with  a  production  of  741.8  million  pounds.  Russia,  in- 
cluding Siberia,  comes  second  with  380.0  million  pounds. 
The  United  States  is  third  with  285.6  million  pounds  and 
Argentina  fourth  with  258.3  million  pounds. 

The  United  States  leads  the  world  in  timber  production. 
* '  Last  winter  we  estimated  that  the  United  States  has  been 
cutting  about  50  per  cent  of  the  total  world's  supply  of 
lumber."  (Letter  from  Chief  of  Forest  Investigation.  U. 
S.  Forest  Service.  Oct.  11,  1919.)  The  same  letter  gives 
the  present  annual  timber  cut.  The  United  States  12.5  bil- 
lion cubic  feet;  Russia  7.1  billion  cubic  feet;  Canada  3.0 
billion  cubic  feet;  Austria-Hungary  2.7  billion  cubic  feet. 

A  third  of  the  iron  ore  produced  in  the  world  in  1912 
came  from  the  United  States.  The  world's  production  in 
that  year  was  154.0  million  tons  {British  Statistical  Ab- 
stract, No.  39,  p.  492).  The  United  States  produced  56.1 
million  tons  or  36  per  cent  of  the  whole ;  Germany  produced 
32.7  million  tons;  France  19.2  million  tons;  the  United 
Kingdom  14.0  million  tons.  No  other  country  is  reported 
as  producing  as  much  as  ten  million  tons. 

The  position  of  the  United  States  as  a  producer  of  iron 
and  steel  was  greatly  enchanced  by  the  war.     The  Daily 


186  THE  AMERICAN  EMPIRE 


Consular  and  Trade  Reports  (July  9,  1919,  p.  155)  give  a 
comparison  between  the  world's  steel  and  iron  output  in 
1914  and  1918.  In  1914  the  United  States  produced  23.3 
million  tons  of  pig  iron;  Germany  produced  14.4  million 
tons ;  the  United  Kingdom  8.9  million  tons,  and  France  5.2 
million  tons.  The  United  States  was  thus  producing  45  per 
cent  of  the  pig  iron  turned  out  in  these  four  countries. 
For  1918  the  pig  iron  production  of  the  United  States  was 
39.1  million  tons.  That  of  the  other  three  countries  was 
22.0  million  tons.  In  that  year  the  United  States  produced 
64  per  cent  of  the  pig  iron  product  of  these  four  countries. 
An  equally  great  lead  is  shown  in  the  case  of  steel  produc- 
tion. In  1914  the  United  States  produced  23.5  million  tons 
of  steel.  Germany,  the  United  Kingdom  and  France  pro- 
duced 27.6  million  tons.  By  1918  the  production  of  the 
United  States  had  nearly  doubled  (45.1  million  tons). 

The  total  pig  iron  output  of  the  world  for  1917  was 
placed  at  66.9  millions  of  tons.  The  world's  production  of 
steel  in  1916  was  placed  at  83  million  tons.  The  United 
States  produced  considerably  more  than  half  of  both  com- 
modities. ("The  Mineral  Industry  During  1918."  New 
York,  McGraw  Hill  Book  Co.,  1919,  pp.  379-80). 

The  two  chief  forms  of  power  upon  wliich  modem  indus- 
try depends  are  petroleum  and  coal.  The  United  States  is 
the  largest  producer  of  both  of  these  commodities.  The 
world's  production  of  petroleum  in  1917  was  506.7  million 
barrels  {Mineral  Resources,  1917,  Part  II,  p.  867).  Of  this 
amount  the  United  States  produced  335.3  million  barrels 
or  66  per  cent  of  the  total.  The  second  largest  producer, 
Russia,  and  the  third,  Mexico,  are  credited  with  69  million 
barrels  and  55.3  million  barrels  respectively. 

As  a  coal  producer  the  United  States  stands  far  ahead 
of  all  other  nations.  The  United  States  Geological  Survey 
(Special  Report,  No.  118)  placed  the  total  coal  production 
of  the  world  in  1913  at  1,478  million  tons.  Of  this  amount 
569.9  million  tons  (38.5  per  cent)  were  produced  in  the 
United  States.  The  production  for  Great  Britain  was  321.7 
million  tons ;  for  Germany  305.7  million  tons ;  for  Austria- 


THE  AMERICAN  EMPIRE  187 

Hungary''  60.6  million  tons.  No  other  country  reported  a 
production  of  as  much  as  fifty  million  tons.  In  1915  tlie 
United  States  produced  40.5  per  cent  of  the  world 's  coal ;  in 
1917  44.2  per  cent;  in  1918  46.2  per  cent. 

Copper  has  become  one  of  the  world's  chief  metals.  Two- 
thirds  of  all  the  copper  is  produced  in  the  United  States. 
Copper  production  in  1916  totaled  3,107  million  pounds 
{Mineral  Resources  in  the  United  States,  1916,  part  I, 
p.  625).  The  production  for  the  United  States  was  1,927.9 
million  pounds  (62  per  cent  of  the  whole).  The  second 
largest  producer,  Japan,  turned  out  179.2  million  pounds. 

The  precious  metals,  gold  and  silver,  are  largely  produced 
in  the  United  States.  The  world's  gold  production  for  1917 
was  423.6  million  dollars  {Mineral  Resources,  1917,  p.  613). 
Africa  produced  half  of  this  amount  (214.6  million  dollars). 
The  United  States  was  second  with  a  production  of  83.8  mil- 
lion dollars  (20  per  cent  of  the  whole).  The  same  publica- 
tion (p.  615)  gives  the  world's  silver  production  in  1917 
as  164  million  ounces.  77.1  million  ounces  (43  per  cent) 
were  produced  in  the  United  States.  The  second  largest 
producer  was  Mexico,  31.2  million  ounces;  and  the  third 
Canada,  with  22.3  million  ounces.  These  three  North 
American  countries  produced  76  per  cent  of  the  world's  out- 
put of  silver. 

Judge  Gary,  speaking  at  the  Annual  Meeting  of  the  Iron 
and  Steel  Institute  (1920)  put  the  situation  in  this  sum- 
mary form: — 

As  frequently  stated,  notwithstanding  the  United  States 
has  only  6%  of  the  world's  population  and  7%  of  the 
world's  land,  yet  we  produce: 

20%  of  the  world's  supply  of  gold, 

25%  of  the  world's  supply  of  wheat, 

40%  of  the  world's  supply  of  iron  and  steel, 

40%  of  the  world's  supply  of  lead, 

40%  of  the  world's  supply  of  silver, 

50%  of  the  world's  supply  of  zinc, 

52%  of  the  world's  supply  of  coal, 


188  JHE  AMERICAN  EMPIRE 


60%  of  the  world's  supply  of  almnirmm, 

60%  of  the  world's  supply  of  copper, 

60%  of  the  world's  supply  of  cotton, 

66%  of  the  world's  supply  of  oil, 

15%  of  the  world's  supply  of  corn, 

85%  of  the  world's  supply  of  automobiles. 

With  the  exception  of  rubber,  practically  all  of  the  essen- 
tial raw  materials  and  food  products  upon  which  modern  in- 
dustrial society  depends  are  produced  largely  in  the  United 
States.  With  less  than  a  sixteenth  of  the  world's  popula- 
tion, the  United  States  produced  from  a  fifth  to  two-thirds 
of  most  of  the  world's  essential  products. 


6.  Shipping 

The  rapid  increase  in  the  foreign  trade  of  the  United 
States  created  a  demand  for  American  shipping  facilities. 
Before  the  Civil  War  the  United  States  held  a  place  as  a 
maritime  nation.  Between  the  Civil  War  and  the  war  with 
Spain  the  energies  of  the  American  people  were  devoted 
to  internal  improvement.  With  the  advent  of  expansion 
that  followed  the  Spanish-American  War,  came  an  insistent 
demand  that  the  United  States  develop  a  merchant  marine 
adequate  to  carry  its  own  foreign  trade. 

The  United  States  Conunlssioner  of  Navigation  in  his 
report  for  1917  (p.  78)  gives  the  net  gross  tonnage  of 
steam  and  sailing  vessels  in  1914  as  45  million  tons  in  all. 
The  tonnage  of  Great  Britain  was  19.8  million  tons;  of 
Germany  4.9  million  tons;  of  the  United  States  3.5  million 
tons;  of  Norway  2.4  million  tons;  of  France  2.2  million 
tons;  of  Japan  1.7  million  tons,  and  of  Italy  1.6  million 
tons. 

The  war  brought  about  great  changes  in  the  distribution 
of  the  world's  shipping.  Germany  was  practically  elimi- 
nated as  a  sliipping  nation.  The  necessity  of  recouping  the 
submarine  losses,  and  of  transporting  troops  and  supplies 
led  the  United  States  to  adopt  a  ship-building  program 


THE  AMERICAN  EMPIRE  189 


that  made  her  the  second  maritime  country  of  the  world. 
Lloyd 's  Register  of  Shipping  gives  the  steam  tonnage  of  the 
United  Kingdom  as  18,111,000  gross  tons  in  June,  1920. 
For  the  same  month  the  tonnage  of  the  United  States  is 
given  as  12,406,000  gross  tons.  Japan  comes  next  with  a 
tonnage  of  2,996,000  gross  tons.  According  to  the  same 
authority  the  United  Kingdom  had  41.6  per  cent  of  the 
world's  tonnage  in  1914  and  33.6  per  cent  in  1920 ;  while  the 
United  States  had  4.7  per  cent  of  the  world's  tonnage  in 
1914  and  24  per  cent  in  1920. 

7.  Wealth  and  Income 

The  economic  advantages  of  the  United  States  enumer- 
ated in  this  chapter  inevitably  are  reflected  in  the  figures 
of  national  wealth  and  national  income.  While  these  fig- 
ures are  estimates  rather  than  conclusive  statements  they 
are,  nevertheless,  indicative  of  a  general  situation. 

During  the  war  a  number  of  attempts  were  made  to 
approximate  the  pre-war  wealth  and  income  of  the  lead- 
ing nations.  Perhaps  the  most  ambitious  of  these  efforts 
was  contained  in  a  paper  on  "Wealth  and  Income  of  the 
Chief  Powers"  read  before  the  Royal  Statistical  Society. 
(See  The  London  Economist,  May  24,  1919,  pp.  958-9.) 
This  and  other  estimates  were  compiled  by  L.  R.  Gottlieb 
and  printed  in  the  Quarterly  Journal  of  Economics  for  Nov. 
1919.  Mr.  Gottlieb  estimates  the  pre-war  national  wealth  of 
Great  Britain,  France,  Italy,  Japan,  Russia,  Belgium,  Ger- 
many, Austria-Hungary,  Turkey  and  Bulgaria  at  366,100 
million  dollars.  At  the  same  time  the  wealth  of  the  United 
States  was  estimated  at  204,400  million  dollars.  Thus  the 
wealth  of  the  United  States  was  equal  to  about  36  per  cent 
of  the  total  wealth  of  the  great  nations  in  question. 

The  same  article  contains  an  estimate  of  pre-war  national 
incomes  for  these  great  powers.  The  total  is  placed  at 
81,100  million  dollars.  The  income  for  the  United  States 
is  placed  at  35,300  million  dollars,  or  more  than  43  per  cent 
of  the  total. 


190  THE  AMERICAN  EMPIRE 

The  war  has  made  important  changes  in  the  wealth  and 
income  of  the  principal  powers.  The  wealth  and  income  of 
Europe  have  been  reduced,  while  the  wealth  and  income 
of  the  United  States  have  been  greatly  increased.  This 
increase  is  rendered  doubly  emphatic  by  the  demoralization 
in  foreign  exchange  which  gives  the  American  dollar  a  posi- 
tion of  unique  authority  in  the  financial  world. 

The  latest  wealth  estimates  {Commerce  and  Finance, 
May  26,  and  July  28,  1920)  in  terms  of  dollars  at  their 
purchasing-power  value,  makes  the  wealth  of  the  whole 
British  Empire  230  billions  of  dollars;  of  France,  100  bil- 
lions; of  Russia,  60  billions;  of  Italy,  40  billions;  of  Japan, 
40  billions;  of  Germany,  20  billions,  and  of  the  United 
States,  500  billions.  These  figures  are  subject  to  altera- 
tion with  the  alteration  of  the  exchange  rates,  but  they  in- 
dicate the  immense  advantage  that  is  possessed  by  the  busi- 
ness men  of  the  United  States  over  the  business  men  of  any 
or  of  all  of  the  other  nations  of  the  world. 

Before  the  war,  the  British  were  the  chief  lenders  in 
the  international  field.  In  1913  Great  Britain  had  about 
20  billions  of  dollars  of  foreign  investments,  as  compared 
with  9  billions  for  France  and  about  6  billions  for  Germany. 
At  the  end  of  1920,  the  British  foreign  investments  had 
shrunk  to  a  fraction  of  their  former  amount,  while  the 
United  States,  from  the  position  of  a  debtor  nation,  had 
become  the  leading  investing  nation  of  the  world,  with  over 
9  billions  of  dollars  loaned  to  the  Allied  governments ;  with 
notice  loans  estimated  at  over  10  billions;  v/ith  foreign  in- 
vestments of  8  billions,  and  goods  on  consignment  to  the 
extent  of  2  billions. 

The  United  States  therefore  began  the  year  1921  with  a 
greater  financial  lead,  by  several  times  over,  than  that  which 
she  held  before  the  war,  when  she  was  credited  with  a 
greater  wealth  and  a  larger  income  than  that  of  any  other 
nation  in  the  world.  The  extent  of  the  advantage  enjoyed 
by  the  United  States  at  the  end  of  1920  cannot  be  stated 
with  any  final  accuracy,  but  its  proportions  are  staggering. 


THE  AMERICAN  EMPIRE  191 


8.  The  Economic  Positwn  of  the  United  States 

Economically  tlie  United  States  is  a  world  power.  She 
occupies  one  of  the  three  ^eat  geographical  areas  in  the 
temperate  zone.  If  she  were  to  include  Canada,  Mexico 
and  Central  America — the  territory  north  of  the  Canal 
Zone — she  would  have  the  greatest  unified  body  of  economic 
advantage  anywhere  in  the  world. 

The  United  States  is  rich  in  practically  all  of  the  im- 
portant industrial  resources.  She  has  a  large,  relatively 
homogeneous  population,  a  great  pai't  of  which  is  directly 
descended  from  the  conquering  ra.ces  of  the  world.  Al- 
most all  of  the  essential  raw  materials  are  produced  in  the 
United  States,  and  in  relatively  large  quantities.  The  pe- 
riod since  the  Spanish  War  has  witnessed  a  rapid  increase 
in  wealth  production.  The  war  of  1914  resulted  in  an  even 
greater  increase  in  shipping.  The  investable  surplus  is 
greater  in  the  United  States  than  in  any  other  nation,  and 
in  amount  as  well  as  in  percent  the  national  debt  is  less 
than  that  in  any  other  important  nation  except  Japan. 
Economically  the  position  of  the  United  States  is  unique. 
The  masters  of  her  industries  hold  a  position  of  great  ad- 
vantage in  the  capitalist  world. 


192  THE  AMERICAN  EMPIRE 

XIV.     THE  PARTITION  OF  THE  EARTH 

1.  Economic  Power  and  Political  Authority 

Economically  the  United  States  is  a  world  power.  Her 
world  position  in  politics  follows  as  a  matter  of  course. 

"While  the  American  people  were  busy  with  internal  de- 
velopment, they  played  an  unimportant  part  in  world  af- 
fairs. They  were  not  competing  for  world  trade,  because 
they  had  relatively  little  to  export ;  they  were  not  building 
a  merchant  marine  because  of  the  smallness  of  their  trad- 
ing activities ;  they  were  not  engaged  in  the  scramble  after 
undeveloped  countries  because,  with  an  undeveloped  coun- 
try of  their  own,  calling  continually  for  enlarged  invest- 
ments, they  had  little  surplus  capital  to  employ  in  foreign 
enterprises. 

This  economic  isolation  of  the  United  States  was  reflected 
in  an  equally  thoroughgoing  political  isolation.  With  the 
exception  of  the  Monroe  Doctrine,  which  in  its  original 
form  was  intended  as  a  measure  of  defense  against  foreign 
political  and  military  aggression,  the  United  States  minded 
its  own  affairs,  and  allowed  the  remainder  of  the  world  to 
go  its  way.  From  time  to  time,  as  necessity  arose,  addi- 
tional territory  was  purchased  or  taken  from  neighboring 
countries — but  all  of  these  transactions,  up  to  the  annexa- 
tion of  Hawaii  (1898)  were  confined  to  the  continent  of 
North  America,  in  which  no  European  nation,  with  the 
exception  of  Great  Britain,  had  any  imperative  territorial 
interest. 

The  economic  changes  which  immediately  preceded  the 
Spanish  War  period  commanded  for  the  United  States  a 
place  among  the  nations.     The  passing  of  economic  aloof- 


THE  AMERICAN  EMPIRE  193 


ness  marked  the  passing  of  political  aloofness,  and  the 
United  States  entered  upon  a  new  era  of  international 
relationships.  Possessed  of  abundant  natural  resources,  and 
having  through  a  long  period  of  peace  developed  a  large 
working  capital  with  which  these  resources  might  be  ex- 
ploited, the  United  States,  at  the  beginning  of  the  twentieth 
century,  was  in  a  position  to  export,  to  trade  and  to  in- 
vest in  foreign  enterprises. 

The  advent  of  the  World  War  gave  the  United  States 
a  dramatic  opportunity  to  take  a  position  which  she  must 
have  assumed  in  any  case  in  a  comparatively  short  time. 
It  had,  however,  one  signal,  diplomatic  advantage, — ^it  en- 
abled the  capitalist  governments  of  Europe  to  accept,  with 
an  excellent  grace,  the  newly  acquired  economic  prominence 
of  the  United  States  and  to  recognize  her  without  question 
as  one  of  the  leading  political  powers.  The  loan  of  ten 
billions  to  Europe;  the  sending  of  two  million  men  at 
double  quick  time  to  the  battle  front ;  the  immense  increases 
in  the  production  of  raw  material  that  followed  the  declara- 
tion of  war  by  the  United  States;  the  thoroughness  dis- 
played by  the  American  people,  once  they  had  decided  to 
enter  the  war,  all  played  their  part  in  the  winning  of  the 
victory.  There  were  feelings,  very  strongly  expressed,  that 
the  United  States  should  have  come  in  sooner;  should  have 
sacrificed  more  and  profiteered  less.  But  once  in,  there 
could  be  no  question  either  of  the  spirit  of  her  armies  or 
of  the  vast  economic  power  behind  them. 

When  it  came  to  dividing  the  spoils  of  victory,  the 
United  States  held,  not  only  the  purse  strings,  but  the 
largest  surpluses  of  food  and  raw  materials  as  well.  Her 
diplomacy  at  the  Peace  Table  was  weak.  Her  representa- 
tives, inexperienced  in  such  matters,  were  no  match  for 
the  trained  diplomats  of  Europe,  but  her  economic  posi- 
tion was  unquestioned,  as  was  her  right  to  take  her  place 
as  one  of  the  '  *  big  five. ' ' 


194  THE  AMERICAN  EMPIRE 


2.  Dividing  the  Spoils 

The  Peace  Conference,  for  purposes  of  treaty  makinj^, 
separated  the  nations  of  the  world  into  five  classes : 

1.  The  great  capitalist  nations. 

2.  The  lesser  capitalist  states. 

3.  Enemy  nations. 

4.  Undeveloped  territories. 

5.  The  socialist  states. 

The  great  capitalist  states  were  five  in  number — Great 
Britain,  France,  Italy,  Japan  and  the  United  States.  These 
five  states  dominated  the  armistice  commission  and  the 
Peace  Conference  and  they  were  expected  to  dominate  the 
League  of  Nations.  The  position  of  these  five  powers  was 
clearly  set  forth  in  the  regulations  governing  procedure  at 
the  Peace  Conference.  Rule  I  reads:  "The  belligerent 
powers  with  general  interests^ — the  United  States  of  Amer- 
ica, the  British  Empire,  France,  Italy  and  Japan — shall 
take  part  in  all  meetings  and  commissions."  (New  York 
Times,  January  20,  1919.)  Under  this  rule  the  Big  Five 
were  the  Peace  Conference,  and  throughout  the  subsequent 
negotiations  they  continued  to  act  the  part. 

The  same  concentration  of  authority  was  read  into  the 
revised  convenant  of  the  League  of  Nations.  Article  4  pro- 
vides that  the  Executive  Council  of  the  League  "shall  con- 
sist of  the  representatives  of  the  United  States  of  America, 
of  the  British  Empire,  of  France,  of  Italy  and  of  Japan, 
together  with  four  other  members  of  the  League."  The 
authority  of  the  Big  Five  was  to  be  maintained  by  giving 
them  five  votes  out  of  nine  on  the  executive  council  of 
the  League,  no  matter  how  many  other  nations  might  be- 
come members. 

It  was  among  the  Big  Five,  furthermore,  that  the  spoils 
of  victory  were  divided.  The  Big  Five  enjoyed  a  full  meal ; 
the  lesser  capitalist  states  had  the  crumbs. 


THE  AMERICAN  EMPIRE  195 


The  enemy  nations  were  stripped  bare.  Their  colonies 
were  taken,  their  foreign  investments  were  confiscated,  their 
merchant  ships  were  appropriated,  they  were  loaded  down 
with  enormous  indemnities,  they  were  dismembered.  In 
short,  they  were  rendered  incapable  of  future  economic 
competition.  The  thoroughgoing  way  in  which  this  strip- 
ping was  accomplished  is  discussed  in  detail  by  J.  M. 
Keynes  in  *'The  Economic  Consequences  of  the  Peace" 
(chapters  4  and  5). 

The  undeveloped  territories — the  economic  opportunities 
upon  which  the  Big  Five  were  relying  for  the  disposal  of 
their  surplus  products  and  surplus  capital,  were  carved 
and  handed  about  as  a  butcher  carves  a  carcass.  Shantung, 
which  Germany  had  taken  from  China,  was  turned  over 
to  Japan  under  circumstances  which  made  it  impossible  for 
China  to  sign  the  Treaty — thus  leaving  her  territory  open 
for  further  aggression.  The  Near  East  was  divided  be- 
tween Great  Britain,  France  and  Italy.  Mexico  was  not 
invited  to  sign  the  treaty  and  her  nam©  was  omitted  from 
the  list  of  those  eligible  to  join  the  League.  The  German 
possessions  in  Africa  and  in  the  Pacific  were  distributed 
in  the  form  of  *' mandates"  to  the  Great  Powers.  The 
principle  underlying  this  distribution  was  that  all  of  the 
unexploited  territory  should  go  to  the  capitalist  victors  for 
exploitation.  The  proportions  of  the  division  had  been  es- 
tablished, previously,  in  a  series  of  secret  treaties  that  had 
been  entered  into  during  the  earlier  years  of  the  war. 

With  the  Big  Five  in  control,  with  the  lesser  capitalist 
states  silenced ;  with  the  border  states  made  or  in  the  mak- 
ing; with  the  enemy  reduced  to  economic  impotence,  and 
the  unexploited  portions  of  the  world  assigned  for  exploita- 
tion, the  conference  was  compelled  to  face  still  another 
problem — the  Socialist  Republic  of  Russia. 

Russia,  Czar  ridden  and  oppressed,  had  entered  the  war 
as  an  ally  of  France  and  Great  Britain.  Russia,  un- 
shackled and  attempting  self-government  on  an  economic 
basis,  was  an  "enemy  of  civilization."  The  Allies  there- 
fore supported  counter-revolution,  organized  and  encour- 


196  THE  AMERICAN  EMPIRE 


aged  warfare  by  the  border  states,  established  and  main- 
tained a  blockade,  the  purpose  of  which  was  the  starva- 
tion of  the  Russian  people  into  submission,  and  did  all 
that  money,  munitions,  supplies,  battleships  and  army  di- 
visions could  do  to  destroy  the  results  of  the  Russian  Rev- 
olution. 

The  Big  Five — assuming  to  speak  for  all  of  the  twenty- 
three  nations  that  had  declared  war  on  Germany — manipu- 
lated the  geography  of  Europe,  reduced  their  enemies  to 
penury,  disposed  of  millions  of  square  miles  of  territory 
and  tens  of  millions  of  human  beings  as  a  gardener  dis- 
poses of  his  produce,  and  then  turned  their  united  strength 
to  the  task  of  crushing  the  only  thing  approaching  self- 
government  that  Russia  has  had  for  centuries. 

A  more  shameless  exhibition  of  imperial  lust  is  not  re- 
corded in  history.  Never  before  were  five  nations  in  a 
position  to  sit  down  at  one  table  and  decide  the  political 
fate  of  the  world.  The  opportunity  was  unique,  and  yet 
the  statesmen  of  the  world  played  the  old,  savage  game  of 
imperial  aggression  and  domination. 

This  brutal  policy  of  dealing  with  the  world  and  its  peo- 
ple was  accepted  by  the  United  States.  Throughout  the 
Conference  her  representatives  occupied  a  commanding 
position;  at  any  time  they  would  have  been  able  to  speak 
with  a  voice  of  almost  conclusive  authority;  they  chose, 
nevertheless,  to  play  their  part  in  this  imperial  spectacle. 
To  be  sure  the  Senate  refused  to  ratify  the  Treaty, — not 
because  of  its  imperial  iniquities,  but  rather  because  there 
was  nothing  in  it  for  the  United  States. 

3.  Italy,  France  and  Japan 

The  shares  of  spoil  falling  to  Italy  and  France  as  a  re- 
sult of  the  treaty  are  comparatively  small  although  both 
coimtries — and  particularly  France — carried  a  terrific  war 
burden.  Japan,  the  least  active  of  any  of  the  leading  par- 
ticipants in  the  war,  received  territory  of  vast  importance 
to  her  future  development. 


THE  AMERICAN  EMPIRE  197 


Italy, — under  the  secret  treaty  of  London,  signed  April 
26,  1915,  by  the  representatives  of  Russia,  France,  Great 
Britain  and  Italy, — was  to  receive  that  part  of  Austria 
known  as  the  Trentine,  the  entire  southern  Tyrol,  the  city 
and  suburbs  of  Trieste,  the  Istrian  Islands  and  the  province 
of  Dalmatia  with  various  adjacent  islands.  Furthermore, 
Article  IX  of  the  Treaty  stipulated  that,  in  the  division  of 
Turkey,  Italy  should  be  entitled  to  an  equal  share  in  the 
basin  of  the  Mediterranean,  and  specifically  to  the  province 
of  Adalia.  Under  Article  XIII,  "In  the  event  of  the  ex- 
pansion of  French  and  English  colonial  domains  in  Africa 
at  the  expense  of  Germany,  France  and  Great  Britain  rec- 
ognize in  principle  the  Italian  right  to  demand  for  her- 
self certain  compensations  in  the  sense  of  expansions  of 
her  lands  in  Erithria,  Somaliland,  in  Lybia  and  colonial 
districts  lying  on  the  boundary,  with  the  colonies  of  France 
and  England."  Substantially,  this  plan  was  followed  in 
the  Peace  Treaty. 

The  territorial  claims  of  France  were  simple.  The  se- 
cret treaties  include  a  note  from  the  French  Minister  of 
Foreign  Affairs  to  the  French  Ambassador  at  Petrograd, 
dated  February  1-14,  1917,  which  stated  that  under  the 
Peace  Treaty : 

"  (1)    Alsace  and  Lorraine  to  be  returned  to  France. 

"(2)  The  boundaries  will  be  extended  at  least  to  the 
limits  of  the  former  principality  of  Lorraine,  and 
will  be  fixed  under  the  direction  of  the  French 
Government.  At  the  same  time  strategic  demands 
must  be  taken  into  consideration,  so  as  to  include 
within  the  French  territory  the  whole  of  the  in- 
dustrial iron  basin  of  Lorraine  and  the  whole  of 
the  industrial  coal-basin  of  the  Saar." 

The  Peace  Treaty  confirmed  these  provisions,  with  thC 
exception  of  the  Saar  Valley,  which  is  to  go  to  France  for 
15  years  under  conditions  which  will  ultimately  cause  its 
annexation  to  France  if  she  desires  it.  France  also  gained 
some  slight  territorial  concessions  in  Africa.    Her  real  ad- 


198  THE  AMERICAN  EMPIRE 


vantage — as  a  result  of  the  peace — lies  in  the  control  of  the 
three  provinces  with  their  valuable  mineral  deposits. 

The  territorial  ambitions  of  Japan  were  confined  to  the 
Far  East.  The  former  Russian  Ambassador  to  Tokio,  un- 
der date  of  February  8,  1917,  makes  the  statement  that 
Japan  was  desirous  of  securing  "the  succession  to  all  the 
rights  and  privileges  possessed  by  Germany  in  the  Shan- 
tung province  and  for  the  acquisition  of  the  islands  north 
of  the  Equator."  In  a  secret  treaty  with  Great  Britain, 
Japan  secured  a  guarantee  covering  such  a  division  of  the 
German  holdings  in  the  Pacific. 

These  concessions  are  of  great  importance  to  Japan.  By 
the  terms  of  the  Treaty  one  of  her  rivals  for  the  trade  of 
the  East  (Germany)  is  eliminated,  and  the  territory  of 
that  rival  goes  to  Japan.  "With  the  control  of  Port  Arthur 
and  Korea  and  Shantung,  Japan  holds  the  gateway  to  the 
heart  of  Northern  China.  The  islands  gained  by  Japan 
as  a  result  of  the  Treaty  give  her  a  barrier  extending  from 
the  Kurile  Islands,  near  Kamchatka,  through  the  Empire 
of  Japan  proper,  to  Formosa.  Farther  out  in  the  Pacific, 
there  are  the  Ladrones,  the  Carolines  and  the  Pelew  Is- 
lands, which,  in  combination,  make  a  series  of  submarine 
bases  that  render  attack  by  sea  difficult  or  impossible,  and 
that  lie,  incidentally,  between  the  United  States  and  the 
Philippine  Islands.  Japan  came  away  from  the  Peace  Con- 
ference with  the  key  to  the  East  in  her  pocket. 

4.  The  Lion's  Share 

The  lion's  share  of  the  Peace  Conference  spoil  went  to 
Great  Britain.  To  each  of  the  other  participants,  certain 
concessions,  agreed  upon  beforehand,  were  made.  The  re- 
mainder of  the  war-spoil  was  added  to  the  British  Empire. 
This  "remainder"  comprised  at  least  a  million  and  half 
square  miles  of  territory,  and  included  some  of  the  most 
important  resources  in  the  world. 

The  territorial  gains  of  Great  Britain  cover  four  areas — 
the  Near  East,  the  Far  East,  Africa,  and  the  South  Pacific. 


THE  AMERICAN  EMPIRE  199 


The  gains  of  Great  Britain  in  the  Near  East  include 
Hedjez  and  Yemen,  the  control  of  which  gives  the  British 
possession  of  virtually  all  of  the  territory  bordering  on 
the  Red  Sea.  The  Persian  Gulf  is  likewise  placed  under 
British  control,  through  her  holding  of  Mesopotamia  and 
her  control  over  Persia  and  Oman.  The  eastern  end  of  the 
Mediterranean  is  held  by  the  British  through  their  control 
of  Palestine. 

Thus  the  gateway  to  the  East, — both  by  land  and  by  sea, 
the  eastern  shores  of  the  Mediterranean,  the  valleys  of  the 
Tigris  and  the  Euphrates  and  the  basin  of  the  Red  Sea  all 
fall  into  the  hands  of  the  British,  who  now  hold  the  heart 
of  the  Near  East.  The  gains  of  Great  Britain  in  Africa 
include  Togoland,  German  Southwest  Africa  and  German 
East  Africa.  With  these  accessions  of  territory,  Great 
Britain  holds  a  continuous  stretch  of  country  from  the 
Cape  to  Cairo.  A  British  subject  can  therefore  travel  on 
British  soil  from  Cape  Town  via  the  Isthmus  of  Suez,  to 
Siam,  covering  a  distance  as  the  crow  flies  of  something 
like  10,000  miles. 

The  British  gains  in  the  South  Pacific  include  Kaiser 
Wilhelm  Land  and  the  German  islands  south  of .  the 
Equator. 

What  these  territorial  gains  mean  in  the  way  of  addi- 
tional resources  for  the  industries  of  the  home  country, 
only  the  future  can  decide.  Certain  it  is,  that  outside  of 
the  Americas,  Central  Europe,  Russia,  China  and  Japan, 
Great  Britain  succeeded  in  annexing  most  of  the  important 
territory  of  the  world. 

The  Chicago  Tribune,  in  one  of  its  charmingly  frank  edi- 
torials, thus  describes  the  gains  to  the  British  Empire  as 
a  result  of  the  war.  ''The  British  mopped  up.  They 
opened  up  their  highway  from  Cairo  to  the  Cape.  They 
reached  out  from  India  and  took  the  rich  lands  of  the 
Euphrates.  They  won  Mesopotamia  and  Syria  in  the  war. 
They  won  Persia  in  diplomacy.  They  won  the  east  coast 
of  the   Red    Sea.     They   put   protecting   territory    about 


200  THE  AMERICAN  EMPIRE 


Egypt  and  gave  India  bulwarks.     They  made  the  eastern 
dream  of  the  Germans  a  British  reality. 

"The  British  never  had  their  trade  routes  so  guarded 
as  now.  They  never  had  their  supremacy  of  the  sea  so 
firmly  established.  Their  naval  competitor,  Germany,  is 
gone.  No  navy  threatens  them.  No  empire  approximates 
their  size,  power,  and  influence. 

**This  is  the  golden  age  of  the  British  Empire,  its  Au- 
gustan age.  Any  imperialistic  nation  would  have  fought 
any  war  at  any  time  to  obtain  such  results,  and  as  im- 
perialistic nations  count  costs,  the  British  cost,  in  spite  of 
its  great  sums  in  men  and  money  was  small."  (January 
4,  1920.) 

5.  Half  the  World — Without  a  Struggle 

Two  significant  facts  stand  out  in  this  record  of  spoils 
distribution.  One  is  that  Great  Britain  received  the  lion's 
share  of  them  in  Asia  and  Africa.  The  other,  that  there 
is  no  mention  of  the  Americas.  Outside  of  the  Western 
Hemisphere,  Great  Britain  is  mistress.  In  the  Americas, 
with  the  exception  of  Canada,  the  United  States  is  supreme. 

There  are  two  reasons  for  this.  One  is  that  Germany's 
ambitions  and  possessions  included  Asia  and  Africa  pri- 
marily— and  not  America.  The  other  is  that  the  Peace 
Conference  recognized  the  right  of  the  United  States  to 
dominate  the  Western  Hemisphere. 

The  representatives  of  the  United  States  declared  that 
their  country  was  asking  for  nothing  from  the  Peace  Con- 
ference. Nevertheless,  the  insistent  clamor  from  across  the 
water  led  the  American  delegation  to  secure  the  insertion 
in  the  revised  League  Covenant  of  Article  XXI  which  read : 
"Nothing  in  this  covenant  shall  be  deemed  to  affect  the 
validity  of  international  engagements,  such  as  treaties  of 
arbitration  or  regional  understandings  like  the  Monroe 
Doctrine  for  securing  the  maintenance  of  peace."  This 
article  coupled  with  the  first  portion  of  Article  X,  "The 


THE  AMERICAN  EMPIRE  201 


members  of  the  League  undertake  to  respect  and  preserve 
as  against  external  aggression  the  territorial  integrity  and 
existing  political  independence  of  all  members  of  the 
League,"  guarantees  to  the  United  States  complete  author- 
ity over  Latin  America,  reserving  to  her  political  suzerainty 
and  economic  priority. 

The  half  of  the  earth  reserved  to  the  United  States  under 
these  provisions  contains  some  of  the  richest  mineral  de- 
posits, some  of  the  largest  timber  areas,  and  some  of  the 
best  agricultural  territory  in  the  world.  Thus  at  the  open- 
ing of  the  new  era,  the  United  States,  at  the  cost  of  a  com- 
paratively small  outlay  in  men  and  money,  has  gniaranteed 
to  her  by  all  of  the  leading  capitalist  powers  practically 
an  exclusive  privilege  for  the  exploitation  of  the  Western 
Hemisphere. 


202  THE  AMERICAN  EMPIRE 


XV.    PAN-AMERICANISM 
1.  America  for  the  Americans 

In  the  partition  of  the  earth,  one-half  was  left  under 
the  control  of  the  United  States,  Among  the  great  nations, 
parties  to  the  war  and  the  peace,  the  United  States  alone 
asked  for  nothing — save  the  acceptance  by  the  world  of 
the  Monroe  Doctrine.  The  doctrine,  as  generally  under- 
stood, makes  her  mistress  of  the  Western  Hemisphere. 

The  Monroe  Doctrine  originated  in  the  efforts  of  Latin 
America  to  establish  its  independence  of  imperial  Europe, 
and  the  counter  efforts  of  imperial  Europe  to  fasten  its 
authority  on  the  newly  created  Latin  American  Republics. 
President  Monroe,  aroused  by  the  European  crusade  against 
popular  government,  wrote  a  message  to  Congress  (1823) 
in  which  he  stated  the  position  of  the  United  States  as 
follows : 

"The  American  continents,  by  the  free  and  independent 
condition  which  they  have  assumed  and  maintained,  are 
henceforth  not  to  be  considered  as  subjects  for  future  colo- 
nization by  any  European  powers." 

Monroe  continues  by  pointing  out  that  the  United  States 
must  view  any  act  which  aims  to  establish  European  au- 
thority in  the  Americas  as  "dangerous  to  our  peace  and 
safety. ' ' 

"The  United  States  will  keep  her  hands  off  Europe;  she 
will  expect  Europe  to  keep  her  hands  off  America,"  was 
the  essence  of  the  doctrine,  which  has  been  popularly  ex- 
pressed in  the  phrase  "America  for  the  Americans."  The 
Doctrine  was  thus  a  statement  of  international  aloofness, — 
a  declaration  of  American  independence  of  the  remainder 
of  the  world. 


THE  AMERICAN  EMPIRE  203 


The  Monroe  Doctrine  soon  lost  its  political  character. 
The  southern  statesmen  who  were  then  guiding  the  destinies 
of  the  United  States  were  looking  with  longing  eyes  into 
Texas,  Mexico,  Cuba  and  other  potential  slave-holding  ter- 
ritory. Later,  the  economic  necessities  of  the  northern 
capitalists  led  them  in  the  same  direction.  Professor  Ro- 
land G.  Usher,  in  his  " Pan- Americanism "  (New  York,  The 
Century  Company,  1915,  pp.  391-392)  insists  that  the  Mon- 
roe Doctrine  stands  "First,  for  our  incontrovertible  right 
of  self-defense.  In  the  second  place  the  Monroe  Doctrine 
has  stood  for  the  equally  undoubted  right  of  the  United 
States  to  champion  and  protect  its  primary  economic  inter- 
est against  Europe  or  America." 

Through  the  course  of  a  century  this  statement  of  de- 
fensive policy  has  been  converted  into  a  doctrine  of  eco- 
nomic pseudo-sovereignty.  It  is  no  longer  a  case  of  keep- 
ing Europe  out  of  Latin  America  but  of  getting  the  United 
States  into  Latin  America. 

The  United  States  does  not  fear  political  aggression  by 
Europe  against  the  Western  Hemisphere.  On  the  contrary, 
the  aggression  to-day  is  largely  economic,  and  the  struggle 
for  the  markets  and  the  investment  opportunities  of  Latin 
America  is  being  waged  by  the  capitalists  of  every  great 
industrial  nation,  including  the  United  States. 

2.  Latin  America 

Four  of  the  Latin  American  countries,  viewed  from  the 
standpoint  of  population  and  of  immediately  available  as- 
sets, rank  far  ahead  of  the  remainder  of  Latin  America. 
Mexico,  with  a  population  in  1914-1915  of  15,502,000,  had 
an  annual  government  revenue  of  $72,687,000.  The  popu- 
lation of  Brazil  is  27,474,000.  The  annual  revenue  (1919) 
is  $183,615,000.  Argentine,  with  a  population  of  8,284,000, 
reported  annual  revenues  of  $159,000,000  (1918)  ;  and 
Chile,  with  a  population  of  3,870,000,  had  an  annual  rev- 
enue of  $77,964,000  (1917).  These  four  states  rank  in 
political  and  economic  importance  close  to  Canada. 


204  THE  AMERICAN  EMPIRE 


Great  Britain  holds  a  mimber  of  strategic  positions  in 
the  West  Indies.  Other  nations  have  minor  possessions  in 
Latin  America.  None  of  these  possessions,  however,  is  of 
considerable  economic  or  political  importance.  There  re- 
main Bolivia,  Uraguay,  Colombia,  Ecuador,  Paraguay, 
Peru,  Venezuela,  and  the  Central  American  states.  The 
most  populous  of  these  countries  is  Peru  (5,800,000  per- 
sons). All  of  the  Central  American  states  combined  have 
a  population  of  less  than  6,000,000.  The  annual  revenues 
of  Uruguay  (population  1,407,000)  are  $30,453,000 
(1918-19).  The  combined  government  revenues  of  all 
Central  America  are  less  than  twenty-five  millions.  {Sta- 
tistical  Abstract  of  the  U.  S.,  1919,  p.  826ff.) 

Compared  with  the  hundred  million  population  of  the 
United  States;  its  estimated  wealth  (1918)  of  250  billions; 
and  its  federal  revenues  of  a  billion  and  a  half  in  1916,  the 
Latin  American  republics  cut  a  very  small  figure  indeed. 
The  United  States,  bristling  with  economic  surplus  and 
armed  with  the  Monroe  Doctrine,  as  accepted  and  inter- 
preted in  the  League  Covenant,  is  free  to  turn  her  attention 
to  the  rich  opportunities  offered  by  the  undeveloped  tem- 
tory  stretching  from  the  Rio  Grande  to  Cape  Horn.  What 
is  there  to  hinder  her  movements  in  this  direction  ?  Noth- 
ing but  the  limitation  on  her  own  needs  and  the  adherence 
to  her  own  public  policies.  This  vast  area,  containing  ap- 
proximately nine  million  square  miles  (three  times  the  area 
of  continental  United  States),  has  a  population  of  only  a 
little  over  seventy  millions.  The  entire  government  rev- 
enues of  the  territory  are  in  the  neighborhood  of  six  hun- 
dred million,  but  so  widely  scattered  are  the  people,  so 
sharp  are  their  nationalistic  differences,  and  so  completely 
have  they  failed  to  build  up  anything  like  an  effective 
league  to  protect  their  common  interests,  that  skillful  ma- 
neuvering on  the  part  of  American  economic  and  political 
interests  should  meet  with  no  effectual  or  thoroughgoing 
opposition. 

The  *' hands  off  America"  doctrine  which  the  United 
States  has  enunciated,  and  which  Europe  has  accepted, 


THE  AMERICAN  EMPIRE  205 


means  first  that  none  of  the  Latin  American  Republics  is 
permitted  to  enter  into  any  entangling  alliances  without 
the  approval  of  the  United  States.  In  the  second  place  it 
means  that  the  United  States  is  free  to  treat  all  Latin 
American  countries  in  the  same  way  that  she  has  treated 
Cuba,  Hayti  and  Nicaragua  during  the  past  twenty  years. 


3.  Economic  "Latin  America" 

The  United  States  is  the  chief  producer — in  the  Western 
Hemisphere — of  the  manufactured  supplies  needed  by  the 
relatively  undeveloped  countries  of  Latin  America.  At 
the  same  time,  the  undeveloped  countries  of  Latin  America 
contain  great  supplies  of  ores,  minerals,  timber  and  other 
raw  materials  that  are  needed  by  the  expanding  manu- 
facturing interests  of  the  United  States.  The  United  States 
is  a  country  with  an  investible  surplus.  Latin  America 
offers  ample  opportunity  for  the  investment  of  that  sur- 
plus. Surrounding  the  entire  territory  is  a  Chinese  wall 
in  the  form  of  the  Monroe  Doctrine — ^intangible  but  none 
the  less  effective. 

Before  the  outbreak  of  the  Great  War,  European  capi- 
talists dominated  the  Latin  American  investment  market. 
The  five  years  of  struggle  did  much  to  eliminate  European 
influence  in  Latin  America. 

The  situation  was  reviewed  at  length  in  a  publication 
of  the  United  States  Department  of  Commerce  "Invest- 
ments in  Latin  America  and  the  British  West  Indies,"  by 
Frederick  M.  Halsey  (Washington  Government  Printing 
Office,  1918)  : 

"Concerning  the  undeveloped  wealth  of  various  South 
American  countries,"  writes  Mr.  Halsey,  "it  may  be  said 
that  minerals  exist  in  all  the  Republics,  that  the  forest  re- 
sources of  all  (except  possibly'-  Uruguay)  are  very  exten- 
sive, that  oil  deposits  have  been  found  in  almost  every 
country  and  are  worked  commercially  in  Argentine,  Colom- 
bia, Chile,  Ecuador,  Peru  and  Venezuela,  and  that  there 


206  THE  AMERICAN  EMPIRE 

are  lands  available  for  the  raising  of  live  stock  and  for 
agricultural  purposes"  (p.  20). 

As  to  the  pre-war  investments,  Mr.  Halsey  points  out 
that  "Great  Britain  has  long  been  the  largest  investor  in 
Latin  America"  (p.  20).  The  total  of  British  invest- 
ments he  places  at  5,250  millions  of  dollars.  A  third  of 
this  was  invested  in  Argentine,  a  fifth  in  Brazil  and  nearly 
a  sixth  in  Mexico.  French  investments  are  placed  at  about 
one  and  a  half  billions  of  dollars.  The  German  investments 
yveve  extensive,  particularly  in  financial  and  trading  in- 
stitutions. United  States  investments  in  Latin  America 
before  the  war  "were  negligible"  (p.  19)  outside  of  the 
investments  in  the  mining  industry  and  in  the  packing 
business. 

Just  how  much  of  a  shift  the  war  has  occasioned  in  the 
ownership  of  Latin  American  railways,  public  utilities, 
mines,  etc.,  it  is  impossible  to  say.  Some  such  change  has 
occurred,  however,  and  it  is  whoUy  in  the  interest  of  the 
United  States. 

Generalizations  which  apply  to  Latin  America  have  no 
force  in  respect  to  Canada.  The  capitalism  of  Canada  is 
closely  akin  to  the  capitalism  of  the  United  States. 

Canada  possesses  certain  important  resources  which  are 
highly  essential  to  the  United  States.  Chief  among  them 
are  agricultural  land  and  timber.  There  are  two  methods 
by  which  the  industrial  interests  of  the  United  States 
might  normally  proceed  with  relations  to  the  Canadian  re- 
sources. One  is  to  attack  the  situation  politically,  the  other 
is  to  absorb  it  economically.  The  latter  method  is  being 
pursued  at  the  present  time.  To  be  sure  there  is  a  large 
annual  emigration  from  the  United  States  into  Canada  (ap- 
proximately 50,000  in  1919)  but  capital  is  migrating  faster 
than  human  beings. 

The  Canadian  Bureau  of  Statistics  reports  (letter  of  May 
20,  1920)  on  "Stocks,  Bonds  and  other  Securities  held  by 
incorporated  and  joint  stock  Companies  engaged  in  manu- 
facturing industries  in  Canada,  1918,"  us  owned  by  8,130,- 


THE  AMERICAN  EMPIRE  207 


368  individual  holders,  distributed  geographically  as  fol- 
lows: Canada,  $945,444,000;  Great  Britain,  $153,758,000; 
United  States,  $555,943,000,  and  other  countries,  $17,221,- 
322.  Thus  one-third  of  this  form  of  Canadian  investment 
is  held  in  the  United  States. 


4.  American  Protectorates 

The  close  economic  inter-relations  that  are  developing  in 
the  Americas,  naturally  have  their  counter-part  in  the  po- 
litical field.  As  the  biLsiness  interests  reach  southward  for 
oil,  iron,  sugar,  and  tobacco  they  are  accompanied  or  fol- 
lowed by  the  protecting  arm  of  the  State  Department  in 
Washington.  Few  citizens  of  the  United  States  realize 
how  thoroughly  the  conduct  of  the  government,  particularly 
in  the  Caribbean,  reflects  the  conduct  of  the  bankers  and 
the  traders. 

Professor  Hart  in  his  "New  American  History"  (Ameri- 
can Book  Co.,  1917,  p.  634)  writes,  "In  addition  the  United 
States  between  1906  and  1916  obtained  a  protectorate  over 
the  neighboring  Latin  American  States  of  Cuba,  Hayti, 
Panama,  Santo  Domingo  and  Nicaragua.  All  together 
these  five  states  include  157,000  square  miles  and  6,000,000 
people."  Professor  Hart  makes  this  statement  under  the 
general  topic,  "What  America  Has  Done  for  the  World." 

The  Monroe  Doctrine,  logically  applied  to  Latin  America, 
can  have  but  one  possible  outcome.  Professor  Chester 
Lloyd  Jones  characterizes  that  outcome  in  the  following 
words,  "Steadily,  quietly,  almost  unconsciously  the  exten- 
sion of  international  responsibility  southward  has  become 
practically  a  fixed  policy  with  the  State  Department.  It 
is  a  policy  which  the  record  of  the  last  sixteen  years  shows 
is  followed,  not  without  protest  from  influential  factions, 
it  is  true,  but  none  the  less  followed,  by  administrations  of 
both  parties  and  decidedly  different  shades  within  one  of 
the  parties.  .  .  .  Protests  will  continue  but  the  logic  of 
events  is  too  strong  to  be  overthrown  by  traditional  argu- 


208  THE  AMERICAN  EMPIRE 


ment  or  prejudice, "     ("  Caribbean  Interests. ' '     New  York, 
Appleton,  1916,  p.  125.) 

Latin  America  is  in  the  grip  of  the  Monroe  Doctrine. 
Whether  the  individual  states  wish  it  or  not  they  are  the 
victims  of  a  principle  that  has  already  shorn  them  of  po- 
litical sovereignty  by  making  their  foreign  policy  subject 
to  veto  by  the  United  States,  and  that  will  eventually  de- 
prive them  of  control  over  their  own  internal  affairs  by 
placing  the  management  of  their  economic  activities  under 
the  direction  of  business  interests  centering  in  the  United 
States.  The  protectorate  which  the  United  States  will  ulti- 
mately establish  over  Latin  America  was  forecast  in  the 
treaty  which  "liberated"  Cuba,  The  resolution  declaring 
war  upon  Spain  was  prefaced  by  a  preamble  which  de- 
manded the  independence  of  Cuba.  Presumably  this  inde- 
pendence meant  the  right  of  self-government.  Actually 
the  sovereignty  of  Cuba  is  annihilated  by  the  treaty  of  July 
1,  1904,  which  provides : 

* 'Article  I.  The  Government  of  Cuba  shall  never  enter 
into  any  treaty  or  compact  with  any  foreign  power  or 
powers  which  will  impair  or  tend  to  impair  the  inde- 
pendence of  Cuba,  nor  in  any  matter  authorize  or  permit 
any  foreign  power  or  powers  to  obtain  by  colonization  or 
for  military  or  naval  purposes,  or  otherwise,  lodgement  in, 
or  control  over  any  portion  of  said  island." 

The  most  drastic  limitations  upon  Cuba's  sovereignty  are 
contained  in  Article  3  which  reads,  "the  Government  of 
Cuba  consents  that  the  United  States  may  exercise  the 
right  to  intervene  for  the  preservation  of  Cuban  independ- 
ence, the  maintenance  of  a  government  adequate  for  the 
protection  of  life,  property  and  individual  liberty,  and  for 
discharging  the  obligation  with  respect  to  Cuba  imposed  by 
the  Treaty  of  Paris  on  the  United  States  now  to  be  assumed 
and  undertaken  by  the  Government  of  Cuba. ' '  Under  this 
article,  the  United  States,  at  her  discretion,  may  intervene 
in  Cuba's  internal  affairs. 

Under  these  treaty  provisions  the  Cuban  Government  is 
not  only  prevented  from  exercising  normal  governmental 


THE  AMERICAN  EMPIRE  209 


functions  in  international  matters,  but  if  a  change  of  in- 
ternal government  should  take  place  which,  in  the  opinion 
of  the  United  States  jeopardized  "life,  property  and  in- 
dividual liberty"  such  a  government  could  be  suppressed 
by  the  armed  forces  of  the  United  States  and  a  government 
established  in  conformity  with  her  wishes.  Theoretically, 
Cuba  is  an  independent  nation.  Practically,  Cuba  has 
signed  away  in  her  treaty  with  the  United  States  every 
important  attribute  of  sovereignty. 

The  fact  that  Cuba  was  a  war-prize  of  the  United  States 
might  be  advanced  as  an  explanation  of  her  anomalous  po- 
sition, were  it  not  for  the  relations  now  existing  between 
the  Dominican  Republic,  Hayti  and  Nicaragua  on  the  one 
hand  and  the  United  States  on  the  other.  The  United 
States  has  never  been  at  war  with  any  of  these  countries, 
yet  her  authority  over  them  is  complete. 

The  Convention  between  the  United  States  and  the  Do- 
minican Republic,  proclaimed  July  25,  1907,  gave  the 
United  States  the  right  to  appoint  a  receiver  of  Dominican 
customs  in  order  that  the  financial  affairs  of  the  Republic 
might  be  placed  on  a  sound  basis.  This  appointment  was 
followed  in  1916  by  the  landing  of  tlie  armed  forces  of  the 
United  States  in  the  territory  of  the  Dominican  Republic. 
On  November  29,  1916,  a  military  government  was  set  up 
by  the  United  States  Marine  Corps  under  a  proclamation 
approved  by  the  President.  * '  This  military  government  at 
present  conducts  the  administration  of  the  government" 
(Letter  from  State  Department,  September  29,  1919). 

The  proclamation  issued  by  the  Commander  of  the  United 
States  Marine  Corps  and  approved  by  the  President,  cited 
the  failure  of  the  Dominican  government  to  live  up  to  its 
treaty  obligations  because  of  internal  dissensions  and  stated 
that  the  Republic  is  made  subject  to  military  government 
and  to  the  exercise  of  military  law  applicable  to  such  occu- 
pation, Dominican  statutes  ''will  continue  in  effect  inso- 
far as  they  do  not  conflict  with  the  objects  of  the  Occupa- 
tion or  necessary  relations  established  thereunder,  and  their 
lawful  administration  will  continue  in  the  hands  of  such 


210  THE  AMERICAN  EMPIRE 


duly  authorized  Dominican  officials  as  may  be  necessary, 
all  under  the  oversight  and  control  of  the  United  States 
forces  exercising  Military  Government."  The  proclama- 
tion further  announces  that  the  Military  Government  will 
collect  the  revenues  and  hold  them  in  trust  for  the  Republic. 

Following  this  proclamation  Captain  II.  S.  Knapp  issued 
a  drastic  order  providing  for  a  press  censorship.  "Any 
comment  which  is  intended  to  be  published  on  the  attitude 
of  the  United  States  Government,  or  upon  anything  con- 
nected with  the  Occupation  and  Military  Government  of 
Santo  Domingo  must  first  be  submitted  to  the  local  censor 
for  approval.  In  case  of  any  violation  of  this  rule  the 
publication  of  any  newspaper  or  periodical  will  be  sus- 
pended ;  and  responsible  persons, — owners,  editors,  or  others 
— will  further  be  liable  to  punishment  by  the  Military  Gov- 
ernment. The  printing  and  distribution  of  posters,  hand- 
bills, or  similar  means  of  propaganda  in  order  to  dissemi- 
nate views  unfavorable  to  the  United  States  Government  or 
to  the  Military  Government  in  Santo  Domingo  is  forbid- 
den." (Order  secured  from  the  Navy  Department  and 
published  by  The  American  Union  against  Militarism,  Dec. 
13,  1916.) 

A  similar  situation  exists  in  Hayti.  The  treaty  of  May 
3,  1916,  provides  that  "The  Government  of  the  United 
States  will,  by  its  good  officers,  aid  the  Haitian  Govern- 
ment in  the  proper  and  efficient  development  of  its  agricul- 
tural, mineral  and  commercial  resources  and  in  the  estab- 
lishment of  the  finances  of  Hayti  on  a  firm  and  solid  basis. ' ' 
(Article  I)  "The  President  of  Hayti  shall  appoint  upon 
nomination  by  the  President  of  the  United  States  a  general 
receiver  and  such  aids  and  employees  as  may  be  necessary 
to  manage  the  customs.  The  President  of  Hayti  shall  also 
appoint  a  nominee  of  the  President  of  the  United  States  as 
'financial  adviser'  who  shall  'devise  an  adequate  system 
of  public  accounting,  aid  in  increasing  revenues'  and  take 
such  other  steps  'as  may  be  deemed  necessary  for  the 
welfare  and  prosperity  of  Hayti.'  "  (Article  II.)  Article 
III  guarantees  "aid  and  protection  of  both  countries  to 


THE  AMERICAN  EMPIRE  211 


the  General  Receiver  and  the  Financial  Adviser."  Under 
Article  X  "The  Haitian  Government  obligates  itself  .  .  . 
to  create  without  delay  an  efficient  constabulary,  urban  and 
rural,  composed  of  native  Haitians.  This  constabulary  shall 
be  organized  and  officered  by  Americans."  The  Haitian 
Government  under  Article  XI,  agrees  not  to  **  surrender 
any  of  the  territory  of  the  Republic  by  sale,  lease  or  other- 
wise, or  jurisdiction  over  such  territory,  to  any  foreign  gov- 
ernment or  power"  nor  to  enter  into  any  treaty  or  con- 
tract that  "will  impair  or  tend  to  impair  the  independence 
of  Hayti."  Finally,  to  complete  the  subjugation  of  the 
Republic,  Article  XIV  provides  that  "should  the  neces- 
sity occur,  the  United  States  will  lend  an  efficient  aid  for 
the  preservation  of  Haitian  independence  and  the  mainte- 
nance of  a  government  adequate  for  the  protection  of  life, 
property  and  individual  liberty." 

A  year  later,  on  August  20,  1917,  the  New  York  Glohe 
carried  the  following  advertisement : — 

Fortune  in  Sugar 

"The  price  of  labor  in  practically  all  the  cane  sugar 
growing  countries  has  gone  steadily  up  for  years,  except 
in  Hayti,  where  costs  are  lowest  in  the  world, 

"Hayii  now  is  under  U.  S.  Control. 

* '  The  Haitian- American  corporation  owns  the  best  sugar 
lands  in  Hayti,  owns  railroads,  wharf,  light  and  power- 
plants,  and  is  building  sugar  mills  of  the  most  modem  de- 
sign. There  is  assured  income  in  the  public  utilities  and 
large  profits  in  the  sugar  business.  "We  recommend  the 
purchase  of  the  stock  of  this  corporation.  Proceedings  are 
being  taken  to  list  this  stock  on  the  New  York  Stock  Ex- 
change. 

"Interesting  story  'Sugar  in  Hayti'  mailed  on  request. 

"P.  W.  Chapman  &  Co.,  53  William  St.,  N.  Y.  C." 


212  THE  AMERICAN  EMPIRE 


Hayti  remained  ''under  United  States  control"  until 
the  revelations  of  the  summer  of  1920  (see  The  Nation, 
July  10  and  August  28,  1920),  when  it  was  shown  that  the 
natives  were  being  compelled,  by  the  American  forces  of 
occupation,  to  perform  enforced  labor  on  the  roads  and  to 
accept  a  rule  so  tyrannous  that  thousands  had  refused  to 
obey  the  orders  of  the  military  authorities,  and  had  been 
shot  for  their  pains.  On  October  14,  1920,  the  Neiu  York 
Times  printed  a  statement  from  Brigadier  General  George 
Bamett,  formerly  Commandant  General  of  the  Marine 
Corps,  covering  the  conditions  in  Hayti  between  the  time 
the  marines  landed  (July,  1915)  and  June,  1920.  General 
Barnett  alleges  in  his  report  that  there  was  evidence  of 
"indiscriminate"  killing  of  the  natives  by  the  American 
Marines;  that  "shocking  conditions"  had  been  revealed  in 
the  trial  of  two  members  of  the  army  of  occupation,  and  that 
the  enforced  labor  system  should  be  abolished  forthwith. 
The  report  shows  that,  during  the  five  years  of  the  occupa- 
tion, 3,250  Haytians  had  been  killed  by  the  Americans. 
During  the  same  period,  the  losses  to  the  army  of  occupation 
were  1  officer  and  12  men  killed  and  2  officers  and  26  men 
wounded. 

The  attitude  of  the  United  States  authorities  toward  the 
Haytians  is  well  illustrated  by  the  following  telegram  which 
the  United  States  Acting  Secretary  of  the  Navy  sent  on 
October  2,  1915,  to  Admiral  Caperton,  in  charge  of  the 
forces  in  Hayti :  *  *  Whenever  the  Haytians  wish,  you  may 
permit  the  election  of  a  president  to  take  place.  The  elec- 
tion of  Dartiguenave  is  preferred  by  the  United  States. ' ' 

The  Cuban  Treaty  established  the  precedent;  the  Great 
"War  provided  the  occasion,  and  while  Great  Britain  was 
clinching  her  hold  in  Persia,  and  Japan  was  strengthening 
her  grip  on  Korea,  the  United  States  was  engaged  in  estab- 
lishing protectorates  over  the  smaller  and  weaker  Latin- 
American  peoples,  who  have  been  subjected,  one  after  an- 
other, to  the  omnipotence  of  their  "Sister  Republic"  of 
the  North. 


THE  AMERICAN  EMPIRE  213 


5.  The  Appropriation  of  Territory 

Protectorates  have  been  established  by  the  United  States, 
where  such  action  seemed  necessary,  over  some  of  the 
weaker  Latin-American  states.  Their  customs  have  been 
seized,  their  governments  supplanted  by  military  law  and 
the  "preservation  of  law  and  order"  has  been  delegated 
to  the  Army  and  Navy  of  the  United  States.  The  United 
States  has  gone  farther,  and  in  Porto  Rico  and  Panama 
has  appropriated  particular  pieces  of  territory. 

The  Porto  Ricans,  during  the  Spanish-American  "War, 
welcomed  the  Americans  as  deliverers.  The  Americans, 
once  in  possession,  held  the  Island  of  Porto  Rico  as  securely 
as  Great  Britain  holds  India  or  Japan  holds  Korea.  The 
Porto  Ricans  were  not  consulted.  They  had  no  opportu- 
nity for  "self-determination."  They  were  spoils  of  war 
and  are  held  to-day  as  a  part  of  the  United  States. 

The  Panama  episode  furnishes  an  even  more  striking 
instance  of  the  policy  that  the  United  States  has  adopted 
toward  Latin- American  properties  that  seemed  particularly 
necessary  to  her  welfare. 

Efforts  to  build  a  Panama  Canal  had  covered  centuries. 
When  President  Roosevelt  took  the  matter  in  hand  he  found 
that  the  Government  of  Colombia  was  not  inclined  to  grant 
the  United  States  sovereignty  over  any  portion  of  its  terri- 
tory. The  treaty  signed  in  1846  and  ratified  in  1848  placed 
the  good  faith  of  the  United  States  behind  the  guarantee 
that  Colombia  should  enjoy  her  sovereign  rights  over  the 
Isthmus.  During  November  1902  the  United  States  ejected 
the  representatives  of  Colombia  from  what  is  now  the 
Panama  Canal  Zone  and  recognized  a  revolutionary  gov- 
ernment which  immediately  made  the  concessions  necessary 
to  enable  the  United  States  to  begin  its  work  of  construct- 
ing the  canal. 

The  issue  is  made  clear  by  a  statement  of  Mr.  Roosevelt 
frequently  reiterated  by  him  (see  The  Outlook,  October  7, 
1911)  and  appearing  in  the  Washington  Post  of  March  24, 


214  THE  AMERICAN  EMPIRE 

1911,  as  follows: — "I  am  interested  in  the  Panama  Canal 
because  I  started  it.  If  I  had  followed  the  traditional  con- 
servative methods  I  would  have  submitted  a  dignified  state 
paper  of  probably  two  hundred  pages  to  the  Congress  and 
the  debate  would  have  been  going  on  yet.  But  I  took  the 
Canal  Zone  and  let  the  Congress  debate,  and  while  the 
debate  goes  on,  the  Canal  does  also." 

Article  35  of  the  Treaty  of  1846  between  the  United 
States  and  Colombia  (then  New  Grenada)  reads  as  follows, 
— "The  United  States  guarantees,  positively  and  efficaci- 
ously to  New  Grenada,  by  the  present  stipulation,  the  per- 
fect neutrality  of  the  before  mentioned  Isthmus  .  .  .  and 
the  rights  of  sovereignty  which  New  Grenada  has  and 
possesses  over  said  territory." 

In  1869  another  treaty  was  negotiated  between  the  United 
States  and  Colombia  which  provided  for  the  building  of  a 
ship  canal  across  the  Istlunus.  This  treaty  was  signed  by 
the  presidents  of  both  republics  and  ratified  by  the  Colom- 
bian Congress.  The  United  States  Senate  refused  its  assent 
to  the  treaty.  Another  treaty  negotiated  early  in  1902  was 
ratified  by  the  United  States  Senate  but  rejected  by  the 
Colombian  Congress.  The  Congress  of  the  United  States 
had  passed  an  act  (June  28,  1902)  "To  provide  for  the 
construction  of  a  canal  connecting  the  waters  of  the  Atlan- 
tic and  the  Pacific  Oceans."  Under  this  act  the  President 
was  authorized  to  negotiate  for  the  building  of  the  canal 
across  the  Isthmus  of  Panama.  If  that  proved  impossible 
within  a  reasonable  time,  the  President  was  to  turn  to  the 
Nicaragua  route.  The  treaty  prepared  in  accordance  with 
this  act  provided  that  the  United  States  would  pay  Colom- 
bia ten  millions  of  dollars  in  exchange  for  the  sovereignty 
over  the  Canal  Zone.  The  Colombian  Congress  after  a 
lengthy  debate  rejected  the  treaty  and  adjourned  on  the 
last  day  of  October,  1902. 

Rumor  had  been  general  that  if  the  treaty  was  not  ratified 
by  the  Colombian  Grovernment,  the  State  of  Panama  would 
secede  from  Colombia,  sign  the  treaty,  and  thus  secure  the 
ten   millions.     In    consequence    of   these    rumors,    which 


THE  AMERICAN  EMPIRE  215 


threatened  transportation   across  the  Isthmus,   American 
war  vessels  were  dispatched  to  Panama  and  to  Colon. 

On  November  3, 1902,  the  Republic  of  Panama  was  estab- 
lished. On  November  13  it  was  recognized  by  the  United 
States.  Immediately  thereafter  a  treaty  was  prepared  and 
ratified  by  both  governments  and  the  ten  millions  were  paid 
to  the  Government  of  Panama. 

Early  in  the  day  of  November  3,  the  Department  of 
State  was  informed  that  an  uprising  had  occurred.  Mr. 
Loomis  wired,  "Uprising  on  Isthmus  reported.  Keep  De- 
partment promptly  and  fully  informed. ' '  In  reply  to  this 
the  American  consul  replied,  *'The  uprising  has  not  oc- 
curred yet;  it  is  announced  that  it  will  take  place  this 
evening.  The  situation  is  critical. ' '  Later  the  same  official 
advised  the  Department  that  (in  the  words  of  the  Presi- 
dential message,  1904)  "the  uprising  had  occurred  and  had 
been  successful  with  no  bloodshed." 

The  Colombian  Government  had  sent  troops  to  put  down 
the  insurrection  but  the  Commander  of  the  United  States 
forces,  acting  under  instructions  sent  from  "Washington  on 
November  2,  prevented  the  transportation  of  the  troops. 
His  instructions  were  as  follows, — "Maintain  free  and  un- 
interrupted transit  if  interruption  is  threatened  by  armed 
force  with  hostile  intent,  either  governmental  or  insurgent, 
at  any  point  within  fifty  miles  of  Panama.  Government 
forces  reported  approaching  the  Isthmus  in  vessels.  Pre- 
vent their  landing,  if,  in  your  judgment,  the  landing 
would  precipitate  a  conflict." 

Thus  a  revolution  was  consummated  under  the  watchful 
eye  of  the  United  States  forces;  the  home  government  at 
Bogota  was  prevented  from  taking  any  steps  to  secure  the 
return  of  the  seceding  state  of  Panama  to  her  lawful  sover- 
eignty, and  within  ten  days  of  the  revolution,  the  new 
Republic  was  recognized  by  the  United  States  Government.^ 


1  For  further  details  see  "Tlie  Panama  Canal"  Papers  presented  to 
the  Senate  by  Mr.  Lodge,  Senate  Document  471,  63rd  Congress,  2nd 
Session. 


216  THE  AMERICAN  EMPIRE 


(Ten  days  was  the  length  of  time  necessary  to  transmit 
a  letter  from  Panama  to  Washington.  Greater  speed  would 
have  been  impossible  unless  the  new  state  had  been  recog- 
nized by  telegraph.) 

6.  The  Logical  Exploiters 

The  people  of  the  United  States  are  the  logical  exploiters 
of  the  Western  Hemisphere — the  children  of  destiny  for 
one  half  the  world.  They  are  pressed  by  economic  neces- 
sity. They  need  the  oil  of  Mexico,  the  coffee  of  Brazil, 
the  beef  of  Argentine,  the  iron  of  Chile,  the  sugar  of  Cuba, 
the  tobacco  of  Porto  Rico,  the  hemp  of  Yucatan,  the  wheat 
and  timber  of  Canada.  In  exchange  for  these  commodities 
the  United  States  is  prepared  to  ship  manufactured  prod- 
ucts. Furthermore,  the  masters  of  the  United  States  have 
an  immense  and  growing  surplus  that  must  be  invested  in 
some  paying  field,  such  as  that  provided  by  the  mines, 
agricultural  projects,  timber,  oil  deposits,  railroad  and 
other  industrial  activities  of  Latin-America. 

The  'rulers  iDif  the  United  States  are  the  victims  o£  axi 
economic  necessity  that  compels  them  to  seek  and  to  find 
raw  materials,  markets  and  investment  opportunities.  They 
are  also  the  possessors  of  sujBScient  economic,  financial,  mili- 
tary and  naval  power  to  make  these  needs  good  at  their 
discretion. 

The  rapidly  increasing  funds  of  United  States  capital 
invested  in  Latin-America  and  Canada,  wiU  demand  more 
and  more  protection.  There  is  but  one  way  for  the  United 
States  to  afford  that  protection — ^that  is  to  see  that  these 
countries  preserve  law  and  order,  respect  property,  and 
follow  the  wishes  of  United  States  diplomacy.  [Wherever 
a  government  fails  in  this  respect,  it  wiU  be  necessary 
for  the  State  Department  in  cooperation  with  the  Navy,  to 
see  that  a  government  is  established  that  will  **make  good.'* 

Under  the  Monroe  Doctrine,  as  it  has  long  been  inter- 
preted, no  Latin-American  Government  will  be  permitted 


THE  AMERICAN  EMPIRE  217 


to  enter  into  entangling  alliances  with  Europe  or  Asia. 
Under  the  Monroe  Doctrine,  as  it  is  now  being  interpreted, 
no  Latin-American  people  will  be  permitted  to  organize  a 
revolutionary  government  that  abolishes  the  right  of  private 
interests  to  own  the  oil,  coal,  timber  and  other  resources. 
The  mere  threat  of  such  action  by  the  Carranza  Govern- 
ment was  enough  to  show  what  the  policy  of  the  United 
States  must  be  in  such  an  emergency. 

The  United  States  need  not  dominate  politically  her 
weaker  sister  republics.  It  is  not  necessary  for  her  to  in- 
terfere with  their  ** independence."  So  long  as  their  re- 
sources may  be  exploited  by  American  capitalists;  so  long 
as  the  investments  are  reasonably  safe ;  so  long  as  markets 
are  open,  and  so  long  as  the  other  necessities  of  United 
States  capitalism  are  fulfilled,  the  smaller  states  of  the 
Western  Hemisphere  will  be  left  free  to  pursue  their  va- 
rious ways  in  prosperity  and  peace. 


THE  AMERICAN  EMPIRE 


X\^L    THE  AMERICAN  CAPITALISTS  AND  WORLD 

EI\n^IRE 

1.  The  Plutocrats  Must  Carry  On 

The  American  plutocrats — those  wlio  by  force  of  their 
wealth  share  in  the  direction  of  public  policy — must  carry 
on.  They  have  no  choice.  If  they  are  to  continue  as  pluto- 
crats, they  must  continue  to  rule.  If  they  continue  to  rule, 
they  must  shoulder  the  duties  of  rulership.  They  may  not 
relish  the  responsibility  'vvhich  their  economic  position  has 
thrust  upon  them  any  more  than  the  sojourners  in  New- 
foundland relish  the  savage  winters.  Nevertheless,  those 
who  own  the  wealth  of  a  capitalist  nation  must  accept  the 
results  of  that  ownership  just  as  those  who  remain  in  New- 
foundland must  accept  the  mnter  storms. 

The  owners  of  American  timber,  mines,  factories,  rail- 
roads, banks  and  newspapei*s  may  dislike  the  connotations 
of  imperialism ;  may  believe  firmly  in  the  principles  of  com- 
petition and  individualism;  may  yearn  for  the  nineteenth 
century  isolation  which  was  so  intimate  a  feature  of  Amer- 
ican economic  life.  But  their  longings  are  in  vain.  The 
old  world  has  passed  forever;  the  sun  has  risen  on  a  new 
day — a  day  of  world  contacts  for  the  United  States. 

Henry  Cabot  Lodge  of  Massachusetts  stated  the  matter 
with  rare  accuracy  in  a  speech  which  he  made  during  the 
discussion  over  the  conquest  of  the  Philippines.  After  ex- 
plaining that  wars  come,  "never  ostensibly,  but  actually 
from  economic  causes,"  Senator  Lodge  said  {Congressional 
Record,  56th  Congress,  2nd  Session,  p.  637.  January  7, 
1901)  : 

"We  occupy  a  great  position  economically.  We  are 
marching  on  to  a  still  greater  one.     Yoa  may  impede  it, 


THE  AMERICAN  EI\IP1RB  219 


you  may  check  it,  but  you  cannot  stop  the  work  of  eco- 
nomic forces.  You  cannot  stop  the  advance  of  the  United 
States.  .  .  .  The  American  people  and  the  economic  forces 
which  underlie  all  are  carrying  us  forward  to  the  economic 
supremacy  of  the  world." 

Senator  Lodge  spoke  the  economic  truth  in  1901.  Wil- 
liam C.  Redfield  reenforced  it  in  an  address  before  the 
American  Manufacturers  Export  Association  {Weekly  Bul- 
letin, April  26,  1920,  p.  7)  :  "We  cannot  be  foreign  mer- 
chants very  much  longer  in  this  country  excepting  on  a 
diminishing  and  diminishing  scale — we  have  got  to  become 
foreign  constructors;  we  have  got  to  build  with  American 
money — foreign  enterprises,  railroads,  utilities,  factories, 
mills,  I  know  not  what,  in  order  that  by  large  ownership 
in  them  we  may  command  the  trade  that  normally  flowa 
from  their  operation."  That  is  sound  capitalist  doctrine. 
Equally  sound  is  the  exliortation  that  follows :  "  In  so  do- 
ing we  shall  be  doing  nothing  new" — only  nev/  for  us.  That 
is  the  way  in  which  Germany  and  Great  Britain  have  built 
up  their  foreign  trade. ' ' 

New  it  is  for  America — but  it  is  the  course  of  empire, 
familiar  to  every  statesman.  The  lesson  which  Bismarck, 
Palmerston  and  Gray  learned  in  the  last  century  is  now 
being  taught  by  economic  pressure  to  the  ruling  class  of 
the  United  States. 

The  elder  generation  of  American  business  men  was  not 
trained  for  world  domination.  To  them  the  lesson  comes 
hard.  The  business  men  of  the  younger  generation  are 
picking  it  up,  however,  with  a  quickness  born  of  paramount 
necessity. 

2.  Training  Imperialists 

Every  great  imperial  structure  has  had  simple  begin- 
nings. Each  imperial  ruling  class  has  doubtless  felt  mis- 
givings, during  the  early  years  of  its  authority.  Hesitat- 
ing, uncertain,  they  have  cast  glances  over  their  shoulders 


220  THE  AMERICAN  EMPIRE 


towards  that  which  was,  but  even  while  they  were  looking 
backward  the  forces  that  had  made  them  rulers  were  thrust- 
ing them  still  farther  forward  along  the  path  of  imperial 
power.  Then  as  generation  succeeded  generation,  the  rul- 
ers learned  their  lesson,  buildinr,  a  tradition  of  rulership 
and  authority  that  was  handed  down  from  father  to  son; 
acquiring  a  vision  of  world  organization  and  world  power 
that  gave  them  confidence  to  go  forward  to  their  own  un- 
doing. The  masters  of  public  life  in  Rome  were  such  peo- 
ple; the  present  masters  of  British  economic  and  political 
affairs  are  such  people. 

American  imperialists  still  are  in  the  making.  Until 
1900  their  eyes  were  set  almost  exclusively  upon  empire 
v/ithin  the  United  States.  Those  who,  before  1860,  dreamed 
of  a  slave  power  surrounding  the  Gulf  of  Mexico,  were 
thrust  down  and  their  places  taken  by  builders  of  railroads 
and  organizers  of  trusts.  To-day  the  sons  and  grandsons 
of  that  generation  of  exploiters  who  confined  their  attention 
to  continental  territory,  are  compelled,  by  virtue  of  the  or- 
ganization which  their  sires  and  grandsires  established,  to 
seek  Empire  outside  the  boundaries  of  North  America. 

During  the  years  when  the  leaders  of  American  business 
life  were  spending  the  major  part  of  their  time  in  * '  getting 
rich, ' '  the  sweep  of  social  and  economic  forces  was  driving 
the  United  States  toward  its  present  imperial  position. 
Now  the  position  has  been  attained,  those  in  authority  have 
no  choice  but  to  accept  the  responsibilities  which  accom- 
pany it. 

Economically  the  United  States  is  a  world  power.  The 
war  and  the  subsequent  developments  have  forced  the  coun- 
try suddenly  into  a  position  of  leadership  among  the  capi- 
talist nations.  The  law  of  capitalism  is :  Struggle  to  dis- 
pose of  your  surplus,  otherwise  you  cannot  survive.  This 
law  has  laid  its  heavy  hand  upon  Great  Britain,  upon 
Prance,  upon  Germany,  and  now  it  has  struck  with  full 
force  into  the  isolated,  provincial  life  of  the  United  States. 
It  is  the  law — immutable  as  the  system  of  gravitation. 


THE  AMERICAN  EMPIRE  221 


Wliile  the  present  system  of  economic  life  exists,  this  law 
will  continue  to  operate.  Therefore  the  masters  of  Ameri- 
can life  have  no  alternative.  If  they  would  survive,  they 
must  dispose  of  their  surplus. 

Politically  the  United  States  is  reco^ized  as  one  of  the 
leaders  of  the  world.  Despite  its  tradition  of  isolation, 
despite  the  unwillingness  of  its  statesmen  to  enter  new 
patl;i3,  despite  the  indifference  of  its  people  to  international 
affairs,  the  resources  and  raw  materials  required  by  the 
industrial  nations  of  Europe,  the  rapidly  growing  surplus 
and  the  newly  acquired  foreign  markets  and  investments 
make  the  United  States  an  integral  part  of  the  life  of  the 
world. 

The  ruling  class  in  the  United  States  has  no  more  choice 
than  the  rulers  of  a  growing  city  whose  boundaries  are  ex- 
tending with  each  increment  of  population.  If  it  is  to  con- 
tinue as  a  ruling  class,  it  must  accept  conditions  as  they  are. 
The  first  of  these  conditions  is  that  the  United  States  is  a 
world  power  neither  because  of  its  virtue  nor  because  of  its 
intelligence  in  the  delicacies  of  the  world  politics,  but  be- 
cause of  the  sheer  might  of  its  economic  organization. 

Economic  necessity  has  forced  the  United  States  into  the 
front  rank  among  the  nations  of  the  world.  Economic 
necessity  is  forcing  the  ruling  class  of  the  United  States  to 
occupy  the  position  of  world  leadership,  to  strengthen  it, 
to  consolidate  it,  and  to  extend  it  at  every  opportunity. 
The  forces  that  played  beside  the  yellow  Tiber  and  the 
sluggish  Nile  are  very  much  the  same  as  those  which  led 
Napoleon  across  the  wheat  fields  of  Europe  and  that  are 
to-day  operating  in  Paris,  London,  and  in  New  York.  The 
forces  that  pushed  the  Roman  Empire  into  its  position  of 
authority  and  led  to  the  organization  of  Imperial  Britain 
are  to-day  operating  with  accelerated  pace  in  the  United 
States.  The  sooner  the  American  people,  and  particularly 
those  who  are  directing  public  policy,  wake  up  to  this  sim- 
ple but  essential  fact,  the  sooner  will  doubt  and  misunder- 
standing be  removed,  the  sooner  will  the  issues  be  drawn 
and  the  nation's  course  be  charted. 


222  THE  AMERICAN  EMPIRE 


3.  The  Logical  Goal 

The  logical  goal  of  the  American  plutocracy  is  the  eco- 
nomic and  incidentally  the  political  control  of  the  world. 
The  rulers  of  Macedon  and  Assyria,  Rome  and  Carthage, 
of  Britain  and  France  labored  for  similar  reasons  to  reach 
this  same  goal.  It  is  economic  fate.  Kings  and  generals 
were  its  playthings,  obeying  and  following  the  call  of  its 
destiny. 

The  rulers  of  antiquity  were  limited  by  a  lack  of  trans- 
portation facilities;  their  ''world"  was  small,  including 
the  basin  of  the  Mediterranean  and  the  land  surrounding  the 
Persian  Gulf  and  the  Indian  Ocean,  nevertheless,  they  set 
out,  one  after  another,  to  conquer  it.  To-day  the  rapid  ac- 
cumulation of  surplus  and  the  speed  and  ease  of  communi- 
cation, the  spread  of  world  knowledge  and  the  larger 
means  of  organization  make  it  even  more  necessary  than  it 
was  of  old  for  the  rulers  of  an  empire  to  find  a  larger  and 
ever  larger  place  in  the  sun.  The  forces  are  more  pressing 
than  ever  before.  The  times  call  more  loudly  for  a  genius 
with  imagination,  foresight  and  courage  who  will  use  the 
power  at  his  disposal  to  write  into  political  history  the 
gains  that  have  already  been  made  a  part  of  economic  life. 
Let  such  a  one  arise  in  the  United  States,  in  the  present 
chaos  of  public  thought,  and  he  could  not  only  himself  dic- 
tate American  public  policy  for  the  remainder  of  his  life, 
but  in  addition,  he  could,  within  a  decade,  have  the  whole 
territory  from  the  Canadian  border  to  the  Panama  Canal 
under  the  American  Flag,  either  as  conquered  or  subject 
territory;  he  could  establish  a  Chinese  wall  around  South 
American  trade  and  opportunities  by  a  very  slight  exten- 
sion of  the  Monroe  Doctrine ;  he  could  have  in  hand  the 
problem  of  an  economic  if  not  a  political  union  with  Can- 
ada, and  could  be  prepared  to  measure  swords  with  the 
nearest  economic  rival,  either  on  the  high  seas  or  in  any 
portion  of  the  world  where  it  might  prove  necessary  to 
join  battle. 


THE  AMERICAN  EMPIRE  223 

Such  a  program  •would  be  a  departure  from  the  tradi- 
tions of  Ajnerican  public  life,  but  the  traditions,  built  by 
a  nation  of  farmers,  have  already  lost  their  significance. 
They  are  historic,  with  no  contemporary  justification.  The 
economic  life  that  has  grown  up  since  1870  of  necessity 
wiU  create  new  public  policies. 

The  success  of  such  a  program  would  depend  upon  four 
things : 

1.  A  coordination  of  American  economic  life. 

2.  A  fast  grip  on  the  agencies  for  shaping  public  opin- 
ion. 

3.  A  body  of  citizens,  martial,  confident,  restless,  am- 
bitious. 

4.  A  ruling  class  with  sufficient  imagination  to  paint,  in 
warm  sympathetic  colors,  the  advantages  of  world  domin- 
ion; and  with  sufficient  courage  to  follow  out  imperial  pol- 
icy, regardless  of  ethical  niceties,  to  its  logical  goal  of  world 
conquest. 

All  four  of  these  requisites  exist  in  the  United  States 
to-day,  awaiting  the  master  hand  that  shall  unite  them. 
Many  of  the  leaders  of  American  public  life  know  this. 
Some  shrink  from  the  issue,  because  they  are  unaccustomed 
to  dream  great  dreams,  and  are  terrified  by  the  immensity 
of  large  thoughts.  Others  lack  the  courage  to  face  the 
new  issues.  Still  others  are  steadily  maneuvering  them- 
selves into  a  position  where  they  may  take  advantage  of  a 
crisis  to  establish  their  authority  and  work  their  imperial 
will.  The  situation  grows  daily  more  inviting ;  the  oppor- 
tunity daily  more  alluring.  The  war-horee,  saddled  and 
bridled,  is  pawing  the  earth  and  neighing.  How  soon  will 
the  rider  come  ? 

4.  Eat  or  Be  Eaten 

The  American  ruling  class  has  been  thrown  into  a  posi- 
tion of  authority  under  a  system  of  international  economi(i 
competition  that  calls  for  initiative  and  courage.  Under 
this  system,  there  are  two  possibilities, — eat  or  be  eaten ! 


224  THE  AMERICAN  EMPIRE 


There  is  no  middle  ground,  no  half  way  measure.  It  is 
impossible  to  stop  or  to  turn  back.  Like  men  engaged  on 
a  field  of  battle,  the  contestants  in  this  international  eco- 
nomic struggle  must  remain  with  their  faces  toward  the 
enemy,  fighting  for  every  inch  that  they  gain,  and  holding 
these  gains  with  their  bodies  and  their  blood,  or  else  they 
must  turn  their  backs,  throw  away  their  weapons,  run  for 
their  lives,  and  then,  hiding  on  the  neighboring  hills,  watch 
while  the  enemy  despoils  the  camp,  and  then  applies  a 
torch  to  the  ruins. 

The  events  of  the  great  war  prove,  beyond  peradventure, 
that  in  the  wolf  struggle  among  the  capitalist  nations,  no 
rules  are  respected  and  no  quarter  given.  Again  and  again 
the  leaders  among  the  allied  statesmen — particularly  Mr. 
Lloyd  George  and  Mr.  Wilson — appealed  to  the  German 
people  over  the  heads  of  their  masters  with  assurances  that 
the  war  was  being  fought  against  German  autocracy,  not 
against  Germans.  ''When  will  the  German  people  throw 
off  their  yoke?"  asked  one  Allied  diplomat.  The  answer 
came  in  November,  1918.  A  revolution  was  contrived,  the 
Kaiser  fled  the  country,  the  autocracy  was  overthrown. 
Germans  ceased  to  fight  with  the  understanding  that  Mr. 
Wilson 's  Fourteen  Points  should  be  made  the  foundation  of 
the  Peace.  The  armistice  terms  violated  the  spirit  if  not 
the  letter  of  the  fourteen  points ;  the  Peace  Treaty  scattered 
them  to  the  winds.  Under  its  provisions  Germany  was 
stripped  of  her  colonies ;  her  investments  in  the  allied  pos- 
sessions were  confiscated;  her  ships  were  taken;  three- 
quarters  of  her  iron  ore  and  a  third  of  her  coal  supply 
were  turned  over  to  other  powers;  motor  trucks,  locomo- 
tives, and  other  essential  parts  of  her  economic  mechanism 
were  appropriated.  Austria  suffered  an  even  worse  fate, 
being  "drawn  and  quartered"  in  the  fullest  sense  of  the 
term.  After  stripping  the  defeated  enemies  of  all  avail- 
able booty,  levying  an  indeterminate  indemnity,  and  dis- 
membering the  German  and  Austrian  Empires,  the  Allies 
established  for  thirty  years  a  Reparation  Commission,  which 
is  virtually  the  economic  dictator  of  Europe,  Thus  for  a 
generation  to  come,  the  economic  life  of  the  vanquished 


THE  AMERICAN  EMPIRE  225 


Empires  will  be  under  the  active  supervision  and  con- 
trol of  the  victors.  Never  did  a  farmer's  wife  pluck  a 
goose  barer  than  the  Allies  plucked  the  Central  Powers. 
(See  the  Treaty,  also  "The  Economic  Consequences  of  the 
Peace,"  J.  M.  Keynes.  New  York,  Harcourt,  Brace  & 
Howe,  1920.) 

Under  the  armistice  terms  and  the  Peace  Treaty  the  Al- 
lies did  to  Germany-  and  Austria  exactly  what  Germany 
and  Austria  would  have  done  to  France  and  Great  Britain 
had  the  war  turned  out  differently.  The  Allied  statesmen 
talked  much  about  democracy,  but  when  their  turn  came 
they  plundered  and  despoiled  with,  a  practiced  imperial 
hand.  France  and  Britain,  as  well  as  Germany  and  Aus- 
tria, were  capitalist  Empires.  The  Peace  embodies  the 
essential  economic  morality  of  capitalist  imperialism,  the 
morality  of  "Eat  or  be  eaten." 


5.  The  Capitalists  and  War 

The  people  and  even  the  masters  of  America  are  inex- 
perienced in  this  international  struggle.  Among  them- 
selves they  have  experimented  with  competitive  industrial- 
ism on  a  national  scale.  Now,  brought  face  to  face  with 
the  world  struggle,  many  of  them  revolt  against  it.  They 
deplore  the  necessities  that  lead  nations  to  make  war  on 
one  another.  They  supported  the  late  war  "to  end  war," 
They  gave,  suffered  and  sacrificed  with  a  keen,  idealistic- 
desire  to  "make  the  world  safe  for  democracy."  They 
might  as  well  have  sought  to  scatter  light  and  sunshine 
from  a  cloudbank. 

The  masters  of  Europe,  who  have  learned  their  trade 
in  long  years  of  intrigue,  diplomacy  and  war,  feel  no  such 
repugnance.  They  play  the  game.  The  American  people 
are  of  the  same  race-stocks  as  the  leading  contestants  in  the 
European  struggle.  They  are  not  a  whit  less  ingenious, 
not  a  whit  less  courageous,  not  a  whit  less  determined. 
When  practice  has  made  them  perfect  they  too  will  play 


226  THE  AMERICAN  EMPIRE 


the  game  just  as  well  as  their  European  cousins  and  their 
play  will  count  for  more  because  of  the  vast  economic  re- 
sources and  surpluses  which  they  possess. 

American  statesmen  in  the  field  of  international  diplo- 
macy are  like  babies,  taking  their  first  few  steps.  Later 
the  steps  come  easier  and  easier,  until  a  child,  who  but 
a  few  months  ago  could  not  walk,  has  learned  to  romp  and 
sport  about.  The  masters  of  the  United  States  are  un- 
trained in  the  arts  of  international  intrigue.  They  showed 
their  inferiority  in  the  most  painful  way  during  the  nego- 
tiations over  the  Paris  Treaty.  They  are  as  yet  unschooled 
in  international  trade,  banking  and  finance.  They  are  also 
inexperienced  in  war,  yet,  having  only  raw  troops,  and 
little  or  no  equipment,  within  two  years  they  made  a  no- 
table showing  on  the  battlefields  of  Europe.  Now  they  are 
busy  learning  their  financial  lessons  with  an  equal  facility. 
A  generation  of  contact  with  world  politics  will  bring  to  the 
fore  diplomats  capable  of  meeting  Europe's  best  on  their 
own  ground.  What  Europe  has  learned,  America  can 
learn;  what  Europe  has  practiced,  America  can  practice, 
and  in  the  end  she  may  excel  her  teachers. 

To-day  economic  forces  are  driving  relentlessly.  Surplus 
is  accumulating  in  a  geometric  ratio — surplus  piling  on  sur- 
plus. This  surplus  must  be  disposed  of.  "While  the  re- 
mainder of  the  world — except  Japan — is  staggering  under 
intolerable  burdens  of  debt  and  disorganization,  the  United 
States  emerges  almost  unscathed  from  the  war,  and  pre- 
pares in  dead  earnest  to  enter  the  international  struggle, — 
to  play  at  the  master  game  of  * '  eat  or  be  eaten, ' ' 

Pride,  ambition  and  love  of  gain  and  of  power  are  pull- 
ing the  American  plutocrats  forward.  The  world  seems 
to  be  within  their  grasp.  If  they  will  reach  out  their 
hands  they  may  possess  it!  They  have  assumed  a  great 
responsibility.  As  good  Americans  worthy  of  the  tradition 
of  their  ancestors,  they  must  see  this  thing  through  to  the 
end!  They  must  win,  or  die  in  the  attempt;  and  it  is  in 
this  spirit  that  they  are  going  forward. 

The  American  capitalists  do  not  want  war  with  Great 


THE  AMERICAN  EMPIRE  227 


Britain  or  with  any  other  country.     They  are  not  seeking 
war.     They  will  regret  war  when  it  comes. 

War  is  expensive,  troublesome  and  dangerous.  The  ex- 
periences of  Europe  in  the  War  of  1914  have  taught  some 
lessons.  The  leaders  and  thinkers  among  the  masters  of 
America  have  visited  Europe.  They  have  seen  the  old  in- 
stitutions destroyed,  the  old  customs  uprooted,  the  old 
faiths  overturned.  They  have  seen  the  economic  order  in 
which  they  were  vitally  concerned  hurled  to  the  earth  and 
shattered.  They  have  seen  the  red  flag  of  revolution  wave 
where  they  had  expected  nothing  but  the  banner  of  victory. 
They  have  seen  whole  populations,  weary  of  the  old  order, 
throw  it  aside  with  an  impatient  gesture  and  bring  a  new 
order  into  being.  They  have  good  reasons  to  understand 
and  fear  the  disturbing  influences  of  war.  They  have  felt 
them  even  in  the  United  States — three  thousand  miles  away 
from  the  European  conflict.  How  much  more  pressing 
might  this  unrest  be  if  the  United  States  had  fought  all 
through  the  war,  instead  of  coming  in  when  it  was  prac- 
tically at  an  end! 

Then  there  is  always  the  danger  of  losing  the  war — and 
such  a  loss  would  mean  for  the  United  States  what  it  has 
meant  for  Germany— economic  slavery. 

Presented  with  an  opportunity  to  choose  between  the 
hazards  of  war  and  the  certainties  of  peace  most  of  the 
capitalist  interests  in  the  United  States  would  without 
question  choose  peace.  There  are  exceptions.  The  manu- 
facturers of  munitions  and  of  some  of  the  implements  and 
supplies  that  are  needed  only  for  war  purposes,  un- 
doubtedly have  more  to  gain  through  war  than  through 
peace,  but  they  are  only  a  small  element  in  a  capitalist 
world  which  has  more  to  gain  through  peace  than  through 
war. 

But  the  capitalists  cannot  choose.  They  are  embedded 
in  an  economic  system  which  has  driven  them — whether 
they  liked  it  or  not — along  a  path  of  imperialism.  Once 
having  entered  upon  this  path,  they  are  compelled  to  fol- 
low it  into  the  sodden  mire  of  international  strife. 


228  THE  AMERICAN  EMPIRE 


6.  The  Imperial  Task 

The  American  ruling  class — the  plutocracy — must  plan 
to  dominate  the  earth ;  to  exploit  it,  to  exact  tribute  from 
it.  Rome  did  as  much  for  the  basin  of  the  Mediterranean. 
Great  Britain  has  done  it  for  Africa  and  Australia,  for 
half  of  Asia,  for  four  million  square  miles  in  North  Amer- 
ica. If  tlie  people  of  one  small  island,  poorly  equipped  with 
resources,  can  achieve  such  a  result,  what  may  not  the  peo- 
ple of  the  United  States  hope  to  accomplish  ? 

That  is  the  imperial  task. 

1.  American  economic  life  must  be  unified.  Already 
much  of  this  work  has  been  done. 

2.  The  agencies  for  shaping  public  opinion  must  be  se- 
cured. Little  has  been  left  for  accomplishment  in 
this  direction. 

3.  A  martial,  confident,  restless,  ambitious  spirit  must 
be  generated  among  the  people.  Such  a  result  is  be- 
ing achieved  by  the  combination  of  economic  and  so- 
cial forces  that  inhere  in  the  present  social  system. 

4.  The  ruling  class  must  be  schooled  in  the  art  of  ruler- 
ship.  The  next  two  generations  will  accomplish  that 
result. 

The  American  plutocracy  must  carry  on.  It  must  con- 
solidate its  gains  and  move  forwai'd  to  greater  achieve- 
ments, with  the  goal  clearly  in  mind  and  the  necessities  of 
imperial  power  thoroughly  mastered  and  understood. 


THE  AMERICAN  EMPIRE  229 


XVII.    THE  NEW  IMPERIAL  ALIGNLIENT 

1.  A  Survey  of  the  Evidence 

Through  the  centuries  empires  have  come  and  gone.  In 
each  age  some  nation  or  people  has  emerged — stronger, 
better  organized,  more  aggressive,  more  powerful  than  its 
neighbors — and  has  conquered  territory,  subjugated  popu- 
lations, and  through  its  ruling  class  has  exploited  the  work- 
ers at  home  and  abroad. 

Europe  has  been  for  a  thousand  years  the  center  of  the 
imperial  struggle, — the  struggle  which  called  into  being 
the  militarism  so  hated  by  the  European  peoples.  It  was 
from  that  struggle  that  millions  fled  to  America,  where 
they  hoped  for  liberty  and  peace. 

The  eighteenth  century  witnessed  the  rise  of  Great 
Britain  to  a  position  of  world  authority.  During  the  nine- 
teenth century  she  held  her  place  against  all  rivals.  "With 
the  assistance  of  Prussia,  she  overthrew  Napoleon  at  Water- 
loo. In  the  Crimean  War  and  the  Russo-Japanese  War 
she  halted  the  povv'er  of  the  Czar.  Half  a  century  after 
Waterloo  Germany,  under  the  leadership  of  Prussia  w^on 
the  Franco-Prussian  War,  and  by  that  act  became  the  lead- 
ing rival  of  the  British  Empire.  Following  the  war,  which 
gave  Germany  control  of  the  important  resources  included 
in  Alsace  and  Lorraine,  there  was  a  steady  increase  in  her 
industrial  efiaciency;  the  success  of  her  trade  was  as  pro- 
nounced as  the  success  of  her  industries,  and  by  1913  the 
Germans  had  a  merchant  fleet  and  a  navy  second  only  to 
those  of  Great  Britain. 

Germany's  economic  successes,  and  her  threat  to  build  a 
railroad  from  Berlin  to  Bagdad  and  tap  the  riches  of  the 
East,  led  the  British  to  form  alliances  with  their  traditional 
enemies — the  French  and  the  Russians.     Russia,  after  the 


230  THE  AMERICAN  EMPIRE 


breakdown  of  Czarism  in  1917,  dropped  out  of  the  Entente, 
and  the  United  States  took  her  place  among  the  Allies  of 
the  British  Empire.  During  the  struggle  France  was  re- 
duced to  a  mere  shell  of  her  former  power.  The  War  of 
1914  bled  her  white,  loaded  her  with  debt,  disorganized  her 
industries,  demoralized  her  finances,  and  although  it  re- 
stored to  her  important  mineral  resources,  it  left  her  too 
weak  and  broken  to  take  real  advantage  of  them. 

The  War  of  1914  decided  the  right  of  Great  Britain  to 
rule  the  Near  East  as  well  as  Southern  Asia  and  the  strategic 
points  of  Africa.  In  the  stripping  of  the  vanquished  and 
in  the  division  of  the  spoils  of  war  the  British  lion  proved 
to  be  the  lion  indeed.  But  the  same  forces  that  gave  the 
British  the  run  of  the  Old  World  called  into  existence  a  rival 
in  the  New. 

People  from  Britain,  Germany  and  the  other  countries  of 
Northern  Europe,  speaking  the  English  language  and  fired 
with  the  conquering  spirit  of  the  motherland,  had  been,  for 
three  centuries,  taming  the  wilderness  of  North  America. 
They  had  found  the  task  immense,  but  the  rewards  equally 
great.  When  the  forces  of  nature  were  once  brought  into 
subjection,  and  the  wilderness  was  inventoried,  it  proved  to 
contain  exactly  those  stores  that  are  needed  for  the  success 
of  modem  civilization.  With  the  Indians  brushed  aside, 
and  the  Southwest  conquered  from  Mexico,  the  new  ruling 
class  of  successful  business  men  established  itself,  and  the 
matter  of  safeguarding  property  rights,  of  building  indus- 
trial empires  and  of  laying  up  vast  stores  of  capital  and 
surplus  followed  as  a  matter  of  course. 

Europe,  busy  with  her  own  affairs,  paid  little  heed  to  the 
New  World,  except  to  send  to  it  some  of  her  most  rugged 
stock  and  much  of  her  surplus  wealth.  The  New  World, 
left  to  itself,  pursued  its  way — in  isolation,  and  with  an  in- 
tensity proportioned  to  the  size  of  the  task  in  hand  and  the 
richness  of  the  reward. 

The  Spanish  War  in  1898  and  the  performance  of  the 
Canadians  in  the  Boer  War  of  1899  astounded  the  world, 


THE  AMERICAN  EMPIRE  231 


but  it  was  the  War  of  1914  that  really  waked  the  Europeans 
to  the  possibilities  of  the  Western  peoples.  The  Canadians 
proved  their  worth  to  the  British  armies.  The  Americans 
showed  that  they  could  produce  prodigious  amounts  of  the 
necessaries  of  war,  and  when  they  did  go  in,  they  inaugu- 
rated a  shipping  program,  raised  and  dispatched  troops, 
furnished  supplies  and  provided  funds  to  an  extent  which, 
up  to  that  time,  was  considered  impossible.  The  years  from 
1914  to  1918  established  the  fact  that  there  was,  in  the 
West,  a  colossus  of  economic  power. 


2.  The  New'International  Line-Up 

There  are  four  major  factors  in  the  new  international 
line-up.  The  first  is  Russia;  the  second  is  the  Japanese 
Empire ;  the  third  is  the  British  Empire  and  the  fourth  is 
the  American  Empire.  Italy  has  neither  the  resources,  the 
wealth  nor  the  population  necessary  to  make  her  a  factor 
of  large  importance  in  the  near  future.  France  is  too  weak 
economically,  too  overloaded  with  debt  and  too  depleted  in 
population  to  play  a  leading  role  in  world  affairs. 

The  Russian  menace  is  immediate.  Bolshevism  is  not 
only  the  antithesis  of  Capitalism  but  its  mortal  enemy.  If 
Bolshevism  persists  and  spreads  through  Central  Europe, 
India  and  China,  capitalism  will  be  wiped  from  the  earth. 

A  federation  of  Russia,  the  Baltic  states,  the  new  border 
provinces,  and  the  Central  Empires  on  a  socialist  basis 
would  give  the  socialist  states  of  central  and  northern  Eu- 
rope most  of  the  European  food  area,  a  large  portion  of  the 
European  raw  material  area  and  all  of  the  technical  skill 
and  machinery  necessary  to  make  a  self-supporting  eco- 
nomic unit.  The  two  hundred  and  fifty  millions  of  people 
in  Russia  and  Germany  combined  in  such  a  socialist  federa- 
tion would  be  as  irresistible  economically  as  they  would  be 
from  a  military  point  of  view. 

Such  a  Central  European  federation,  developing  as  it 
must  along  the  logical  lines  that  lead  into  India  and  China 


232  THE  AMERICAN  EMPIRE 


would  be  the  strongest  single  unit  in  the  world,  viewed 
from  the  standpoint  of  resources,  of  population,  of  produc- 
tive power  or  of  military  strength.  The  only  possible 
rivals  to  such  a  combination  would  be  the  widely  scattered 
forces  of  the  British  Empire  and  the  United  States,  sepa- 
rated from  it  by  the  stretches  of  the  Atlantic  Ocean. 
Against  such  a  grouping  Japan  would  be  powerless  be- 
cause it  would  deprive  her  of  the  source  of  raw  materials 
upon  which  she  must  rely  for  her  economic  development. 
Great  Britain  with  her  relatively  small  population  and  her 
rapidly  diminishing  resources  could  make  no  head  against 
such  a  combination  even  with  the  assistance  of  her  colonial 
empire.  Northern  India  is  as  logical  a  home  for  Bolshe- 
vism as  Central  China  or  South-eastern  Russia.  Connect 
European  Russia,  Germany,  Austria-Hungary,  Siberia, 
India  and  China  with  bonds  that  make  effective  cooperation 
possible  and  these  countries — containing  nearly  two-thirds 
of  the  population  of  the  world,  and  possessed  of  the  re- 
sources necessary  to  maintain  a  modern  civilization — could 
laugh  at  outside  interference. 

Two  primary  difficulties  confront  the  organizers  of  the 
Federated  Socialist  Republics  of  Europe  and  Asia.  One 
is  nationality,  language,  custom  and  tradition,  together 
with  the  ancient  antagonisms  which  have  been  so  carefully 
nurtured  through  the  centuries.  The  other  is  the  fright- 
ful economic  disorganization  prevalent  throughout  Central 
Europe, — a  disorganization  which  would  be  increased 
rather  than  diminished  by  the  establishment  of  new  forms 
of  economic  life.  Even  if  such  an  organization  were  per- 
fected, it  must  remain,  for  a  long  time  to  come,  on  a  de- 
fensive basis. 

3.  The  Yellow  Peril 

The  "yellow  peril"  thus  far  is  little  more  than  the 
Japanese  menace  to  British  and  American  trade  in  the  Far 
East.  The  Japanese  Archipelago  is  woefully  deficient  in 
coal,  iron,  petroleum,  water  power  and  agricultural  land. 
The  country  is  over-populated  and  must  depend  for  its 


THE  AMERICAN  EMPIRE  233 


supplies  of  food  and  raw  materials  upon  continental  Asia. 
There  seems  to  be  no  probability  that  Japan  and  China 
can  make  any  eit'ective  working  agreement  in  the  near 
future  that  will  constitute  an  active  menace  to  the  su- 
premacy of  the  white  race.  Alone  Japan  is  too  weak  in 
resources  and  too  sparse  in  population.  Combined  with 
China  she  would  be  formidable,  but  her  military  policy  in 
Korea  and  in  the  Shantung  Province  have  made  any  effec- 
tive cooperation  with  China  at  least  temporarily  impossible. 

Furthermore,  the  Japanese  are  not  seeking  world  con- 
quest. On  the  contrary,  they  are  bent  upon  maintaining 
their  traditional  aloofness  by  having  a  Monroe  Doctrine 
for  the  East.  This  doctrine  will  be  summed  up  in  the 
phrase,  **The  East  for  the  Easterners," — the  easterners  be- 
ing the  Japanese.  Such  a  policy  would  prove  a  serious 
menace  to  the  trade  of  the  United  States  and  of  Great 
Britain.  It  would  prove  still  more  of  a  hindrance  to  the 
investment  of  American  and  British  capital  in  the  very 
promising  Eastern  enterprises,  and  would  close  the  door  on 
the  Western  efforts  to  develop  the  immense  industrial  re- 
sources of  China.  The  recent  ** Chinese  Consortium,"  in 
•which  Japan  joined  with  great  reluctance,  suggests  that  the 
major  capitalist  powers  have  refused  to  recognize  the  ex- 
clusive right  of  Japan  to  the  economic  advantages  of  the 
Far  East.  How  seriously  this  situation  will  be  taken  by 
the  United  States  and  Great  Britain  depends  in  part  upon 
the  vigor  with  which  Japan  prosecutes  her  claims  and 
in  part  upon  the  preoccupation  of  these  two  great  powers 
with  Bolshevism  in  Europe  and  with  their  own  competitive 
activities  in  ship  building,  trade,  finance  and  armament. 


4.  The  British  and  the  American  Empires 

The  two  remaining  major  forces  in  world  economics  and 
politics  are  the  British  Empire  and  the  American  Empire, 
— the  mistress  of  the  world,  and  her  latest  rival  in  the 
competition  for  world  power.  Between  them,  to-day,  most 
of  the  world  is  divided.     The  British  Empire  includes  the 


234  THE  AMERICAN  EMPIRE 


Near  East,  Southern  Asia,  Africa,  Australia  and  half  of 
North  America.  Dogging  her  are  Germany,  France, 
Russia  and  Italy,  and,  as  she  goes  to  the  Far  East, — Japan. 
The  United  States  holds  the  Western  Hemisphere,  where 
she  is  supreme,  with  no  enemy  worthy  the  name. 

The  British  power  was  shaken  by  the  War  of  1914. 
Never,  in  modern  times,  had  the  British  themselves,  been 
compelled  to  do  so  much  of  the  actual  fighting.  The  war 
debt  and  the  disorganization  of  trade  incident  to  the  war 
period  proved  serious  factors  in  the  curtailment  of  British 
economic  supremacy.  At  the  same  time,  the  territorial 
gains  of  the  British  were  enormous,  particularly  in  the 
Near  East. 

The  Americans  secured  real  advantages  from  the  war. 
They  grew  immensely  rich  in  profiteering  during  the  first 
three  years,  they  emerged  with  a  relatively  small  debt, 
with  no  great  loss  of  life,  and  with  the  greatest  economic 
surpluses  and  the  greatest  immediate  economic  advantages 
possessed  by  any  nation  of  the  world. 

The  British  Empire  was  the  acknowledged  mistress  of 
the  world  in  1913.  Her  nearest  rival  (Germany)  had  one 
battleship  to  her  two ;  one  ton  of  merchant  shipping  to  her 
three,  and  two  dollars  of  foreign  investments  to  her  five. 
This  rivalry  was  punished  as  the  successive  rivals  of  the 
British  Empire  have  been  punished  for  three  hundred 
years. 

The  war  was  won  by  the  British  Empire  and  her  Allies, 
but  in  the  hour  of  victory  a  new  rival  appeared.  By  1920 
that  rival  had  a  naval  program  which  promised  a  fleet 
larger  than  the  British  fleet  in  1924  or  1925 ;  within  three 
years  she  had  increased  her  merchant  tonnage  to  two-thirds 
of  the  British  tonnage,  and  her  foreign  investments  were 
three  times  the  foreign  investments  of  Great  Britain.  This 
new  rival  was  the  American  Empire — whose  immense  eco- 
nomic strength  constituted  an  immediate  threat  to  the 
world  power  of  Great  Britain. 


THE  AMERICAN  EMPIRE  235 


5.  The  Next  Incident  in  the  Great  War 

Some  nation,  or  some  group  of  nations  has  always  been 
in  control  of  the  known  world  or  else  in  active  competi- 
tion for  the  right  to  exercise  such  a  control.  The  present 
is  an  era  of  competition. 

Capitalism  has  revolutionized  the  world's  economic  life. 
By  1875  the  capitalist  nations  were  in  a  mad  race  to  de- 
termine which  one  should  dominate  the  capitalist  world  and 
have  first  choice  among  the  undeveloped  portions  of  the 
earth.  The  competitors  were  Great  Britain,  Germany, 
France,  Russia  and  Italy.  Japan  and  the  United  States 
did  not  really  enter  the  field  for  another  generation. 

The  War  of  1914  decided  this  much: — ^that  France  and 
Italy  were  too  weak  to  play  the  big  game  in  a  big  way, 
that  Germany  could  not  compete  effectively  for  some  time 
to  come;  that  the  Russians  would  no  longer  play  the  old 
game  at  all.  There  remained  Japan,  Great  Britain  and 
the  United  States  and  it  is  among  these  three  nations  that 
the  capitalist  world  is  now  divided.  Japan  is  in  control 
of  the  Far  East.  Great  Britain  holds  the  Near  East, 
Africa  and  Australia;  the  United  States  dominates  the 
Western  Hemisphere. 

The  Great  War  began  in  1914.  It  will  end  when  the 
question  is  decided  as  to  which  of  these  three  empires  will 
control  the  Earth. 

Great  Britain  has  been  the  dominant  factor  in  the  world 
for  a  century.  She  gained  her  position  after  a  terrific 
struggle,  and  she  has  maintained  it  by  vanquishing  Hol- 
land, Spain,  France  and  Germany. 

The  United  States  is  out  to  capture  the  economic  su- 
premacy of  the  earth.  Her  business  men  say  so  frankly. 
Her  politicians  fear  that  their  constituents  are  not  as  yet 
ready  to  take  such  a  step.  They  have  been  reassured,  how- 
ever, by  the  presidential  vote  of  November,  1920.     Ameri- 


236  THE  AMERICAN  EMPIRE 


can  business  life  already  is  imperial,  and  political  senti- 
ment is  moving  rapidly  in  the  same  direction. 

Great  Britain  holds  title  to  the  pickings  of  the  world. 
America  wants  some  or  all  of  them.  The  two  countries 
are  headed  straight  for  a  conflict,  which  is  as  inevitable 
as  morning  sunrise,  unless  the  menace  of  Bolshevism  grows 
so  strong,  and  remains  so  threatening  that  the  great  capi- 
talist rivals  will  be  compelled  to  join  forces  for  the  sal- 
vation of  capitalist  society. 

As  economic  rivalries  increase,  competition  in  military 
and  naval  preparation  will  come  as  a  matter  of  course. 
Following  these  will  be  the  efforts  to  make  political  al- 
liances— in  tlie  East  and  elsewhere. 

These  two  countries  are  old  time  enemies.  The  roots 
of  that  enmity  lie  deep.  Two  wars,  the  white  hot  feeling 
during  the  Civil  War,  the  anti-British  propaganda,  carried, 
within  a  few  years,  through  the  American  schools,  the 
traditions  among  the  officers  in  the  American  navy,  the 
presence  of  1,352,251  Irish  born  persons  in  the  United 
States  (1910),  the  immense  pliinder  seized  by  the  British 
during  the  War  of  1914, — these  and  many  other  factors 
will  make  it  easy  to  whip  the  American  people  into  a 
war-frenzy  against  the  British  Empire. 

Were  there  no  economic  rivalries,  such  antagonisms 
might  slumber  for  decades,  but  with  the  economic  struggle 
so  active,  these  other  matters  will  be  kept  continually  m 
the  foreground. 

The  capitalists  of  Great  Britain  have  faced  dark  days 
and  have  surmounted  huge  obstacles.  They  are  not  to  be 
turned  back  by  the  threat  of  rivalry.  The  American  capi- 
talists are  backed  by  the  greatest  available  surpluses  in  the 
world;  they  are  ambitious,  full  of  enthusiasm  and  energy, 
they  are  flushed  with  their  recent  victory  in  the  world  war, 
and  overwhelmed  by  the  unexpected  stores  of  wealth  that 
have  come  to  them  as  a  result  of  the  conflict.  They  are  im- 
bued with  a  boundless  faith  in  the  possibilities  of  their 
country.    Neither  Great  Britam  nor  the  United  States  is 


THE  AMERICAN  EMPIRE  237 


in  a  frame  of  mind  to  make  concessions.  Each  is  confident 
— the  British  with  the  traditional  confidence  of  centuries 
of  world  leadership ;  the  Americans  with  the  buoyant, 
idealistic  confidence  of  youth.  It  is  one  against  the  other 
until  the  future  supremacy  of  the  world  is  decided. 


6.  The  Imperial  Task 

American  business  interests  are  engaged  in  the  work  of 
building  an  international  business  structure.  American 
industry,  directed  from  the  United  States,  exploiting 
foreign  resources  for  American  profit,  and  financed  by 
American  institutions,  is  gaining  a  footing  in  Latin 
America,  in  Europe  and  Asia. 

The  business  men  of  Rome  built  such  a  structure  two 
thousand  years  ago.  They  competed  with  and  finally 
crushed  their  rivals  in  Tyre,  Corinth  and  Carthage,  In 
the  early  days  of  the  Empire,  they  were  the  economic 
masters,  as  well  as  the  political  masters  of  the  known  world. 

Within  two  centuries  the  business  men  of  Great  Britain 
have  built  an  international  business  structure  that  has 
known  no  equal  since  the  days  of  the  Cffisars.  Perhaps 
it  is  greater,  even,  than  the  economic  empire  of  the  Romans. 
At  any  rate,  for  a  century  that  British  empire  of  com- 
merce and  industry  has  gone  unchallenged,  save  by  Ger- 
many. Germany  has  been  crushed.  But  there  is  an  in- 
dustrial empire  rising  in  the  West.  It  is  new.  Its 
strength  is  as  yet  undetermined.  It  is  uncoordinated.  A 
new  era  has  dawned,  however,  and  the  business  men  of  the 
United  States  have  made  up  their  minds  to  win  the  eco- 
nomic supremacy  of  the  earth. 

Already  the  war  is  on  between  Great  Britain  and  the 
United  States.  The  two  countries  are  just  as  much  at 
war  to-day  as  Great  Britain  and  Germany  were  at  war 
during  the  twenty  years  that  preceded  1914.  The  issues 
are  essentially  the  same  in  both  cases, — commercial  and 
economic  in  character,  and  it  is  these  economic  and  com- 


238  THE  AMERICAN  EMPIRE 


mercial  issues  that  are  the  chief  causes  of  modem  mili- 
tary wars — that  are  in  themselves  economic  wars  which 
may  at  any  moment  be  transferred  to  the  military  arena. 

British  capitalists  are  jealously  guarding  the  privileges 
that  they  have  collected  through  centuries  of  business  and 
military  conflict.  The  American  capitalists  are  out  to  se- 
cure these  privileges  for  themselves.  On  neither  side 
would  a  military  settlement  of  the  issue  be  welcomed.  On 
both  sides  it  would  be  regarded  as  a  painful  necessity. 
War  is  an  incident  in  imperialist  policy.  Yet  the  position 
of  the  imperialist  as  an  international  exploiter  depends 
upon  his  ability  to  make  war  successfully.  "War  is  a  part 
of  the  price  that  the  imperialist  must  pay  for  his  oppor- 
tunity to  exploit  and  control  the  earth. 

After  Sedan,  it  was  Germany  versus  Great  Britain  for 
the  control  of  Europe.  After  Versailles  it  is  the  United 
States  versus  Great  Britain  for  the  control  of  the  capital- 
ist earth.  Both  nations  must  spend  the  next  few  years  in 
active  preparation  for  the  conflict. 

The  governments  of  Great  Britain  and  the  United  States 
are  to-day  on  terms  of  greatest  intimacy.  Soon  an  issue 
will  arise — perhaps  over  Mexico,  perhaps  over  Persia,  per- 
haps over  Ireland,  perhaps  over  the  extension  of  American 
control  in  the  Caribbean.  There  is  no  difficulty  of  finding 
a  pretext. 

Then  there  will  follow  the  time-honored  method  of  arous- 
ing the  people  on  either  side  to  wrath  against  those  across 
the  border.  Great  Britain  will  point  to  the  race-riots  and 
negro-lynchings  in  America  as  a  proof  that  the  people  of 
the  United  States  are  barbarians.  British  editors  will  cite 
the  wanton  taking  of  the  Canal  Zone  as  an  indication  of 
the  willingness  of  American  statesmen  to  go  to  any  lengths 
in  their  effort  to  extend  their  dominion  over  the  earth. 
The  newspapers  of  the  United  States  will  play  up  the 
terrorism  and  suppression  in  Ireland  and  there  are  many 
Irishmen  more  than  ready  to  lend  a  hand  in  such  an  enter- 
prise; tyranny  in  India  will  come  in  for  a  generous  share 
of  comment;  then  there  are  the  relations  between  Great 


THE  AMERICAN  EMPIRE  239 

Britain  and  the  Turks,  and  above  all,  there  are  the  evi- 
dences in  the  Paris  Treaty  of  the  way  in  which  Great 
Britain  is  gradually  absorbing  the  earth.  Unless  the 
power  of  labor  is  strong  enough  to  turn  the  blow,  or  un- 
less the  capitalists  decide  that  the  safety  of  the  capitalist 
world  depends  upon  their  getting  together  and  dividing 
the  plunder,  the  result  is  inevitable. 

The  United  States  is  a  world  Empire  in  her  own  right. 
She  dominates  the  Western  Hemisphere.  Young  and  in- 
experienced, she  nevertheless  possesses  the  economic  ad- 
vantages and  political  authority  that  give  her  a  voice  in 
all  international  controversies.  Only  twenty  years  have 
passed  since  the  organizing  genius  of  America  turned  its 
attention  from  exclusively  domestic  problems  to  the  prob- 
lems of  financial  imperialism  that  have  been  agitating 
Europe  for  a  half  a  century.  The  Great  War  showed 
that  American  men  make  good  soldiers,  and  it  also  showed 
that  American  wealth  commands  world  power. 

With  the  aid  of  Russia,  France,  Japan  and  the  United 
States  Great  Britain  crushed  her  most  dangerous  rival — 
Germany.  The  struggle  which  destroyed  Germany's  eco- 
nomic and  military  power  erected  in  her  stead  a  more 
menacing  economic  and  military  power — ^the  United  States. 
Untrained  and  inexperienced  in  world  affairs,  the  master 
class  of  the  United  States  has  been  placed  suddenly  in  the 
title  role.  America  over  night  has  become  a  world  em- 
pire and  over  night  her  rulers  have  been  called  upon  to 
think  and  act  like  world  emperors.  Partly  they  succeeded, 
partly  they  bungled,  but  they  learned  much.  Their  appe- 
tites were  whetted,  their  imaginations  stirred  by  the  vision 
of  world  authority.  To-day  they  are  talking  and  writing, 
to-morrow  they  will  act — no  longer  as  novices,  but  as 
masters  of  the  ruling  class  in  a  nation  which  feels  herself 
destined  to  rule  the  earth. 

The  imperial  struggle  is  to  continue.  The  Japanese 
Empire  dominates  the  Far  East;  the  British  Empire 
dominates  Southern  Asia,  the  Near  East,  Africa  and 
Australia;  the  American  Empire  dominates  the  Western 


240  THE  AMERICAN  EMPIRE 


Hemisphere.  It  is  impossible  for  these  three  great  em- 
pires to  remain  in  rivalry  and  at  peace.  Economic  struggle 
is  a  form  of  war,  and  the  economic  struggle  between  them 
is  now  in  progress. 

7.  Continuing  the  Imperial  Struggle 

The  "War  of  1914  was  no  war  for  democracy  in  spite  of 
the  fact  that  millions  of  the  men  who  died  in  the  trenches 
believed  that  they  were  fighting  for  freedom.  Rather  it 
was  a  war  to  make  the  world  safe  for  the  British  Empire. 
Only  in  part  was  the  war  successful.  The  old  world  was 
made  safe  by  the  elimination  of  Britain's  two  dangerous 
rivals — Germany  and  Russia;  but  out  of  the  conflict 
emerged  a  new  rival — unexpectedly  strong,  well  equipped 
and  eager  for  the  conflict. 

The  war  did  not  destroy  imperialism.  It  was  fought 
between  five  great  empires  to  determine  which  one  should 
be  supreme.  In  its  result,  it  gave  to  Great  Britain  rather 
than  to  Germany  the  right  to  exploit  the  undeveloped  por- 
tions of  Asia  and  of  Africa. 

The  Peace — ^under  the  form  of  "mandates" — ^makes  the 
process  of  exploitation  easier  and  more  legal  than  it  ever 
has  been  in  the  past.  The  guarantees  of  territorial  in- 
tegrity, under  the  League  Covenant,  do  more  than  has 
ever  been  done  heretofore  to  preserve  for  the  imperial 
masters  of  the  earth  their  imperial  prerogatives. 

New  names  are  being  used  but  it  is  the  old  struggle. 
Egypt  and  India  helped  to  win  the  war,  and  by  that  very 
process,  they  fastened  the  shackles  of  servitude  more  firmly 
upon  their  own  hands  and  feet.  The  imperialists  of  the 
■world  never  had  less  intention  than  they  have  to-day  of 
quitting  the  game  of  empire  building.  Quite  the  con- 
trary— a  wholly  new  group  of  empire  builders  has  been 
quickened  into  life  by  the  experiences  of  the  past  five 
years. 

The  present  struggle  for  the  possession  of  the  oil  fields 
of  the  world  is  typical  of  the  economic  conflicts  that  are 
involved  in  imperial  struggles.    For  years  the  capitalists 


THE  AMERICAN  EMPIRE  241 


of  the  great  investing  nations  have  been  fighting  to  con- 
trol the  oil  fields  of  Mexico.  They  have  hired  brigands, 
bought  governors,  corrupted  executives.  The  war  settled 
the  Mexican  question  in  favor  of  the  United  States. 
Mexico,  considered  internationally,  is  to-day  a  province  of 
the  American  Empire. 

During  the  blackest  days  of  the  war,  when  Paris  seemed 
doomed,  the  British  divided  their  forces.  One  army  was 
operating  across  the  deserts  of  the  Near  East.  For  what 
purpose  ?  When  the  Peace  was  signed.  Great  Britain  held 
two  vantage  points — the  oil  fields  of  the  Near  East  and 
the  road  from  Berlin  to  Bagdad. 

The  late  war  was  not  a  war  to  end  war,  nor  was  it  a 
war  for  disarmament.  German  militarism  is  not  de- 
stroyed; the  appropriations  for  military  and  naval  pur- 
poses, made  by  the  great  nations  during  the  last  two  years, 
are  greater  than  they  have  ever  been  in  any  peace  years 
that  are  known  to  history. 

The  world  is  preparing  for  war  to-day  as  actively  as 
it  was  in  the  years  preceding  the  War  of  1914.  The  years 
from  1914  to  1918  were  the  opening  episodes;  the  first 
engagements  of  the  Great  War. 

There  is  no  question,  among  those  who  have  taken  the 
trouble  to  inform  themselves,  but  that  the  War  of  1914 
was  fought  for  economic  and  commercial  advantage.  The 
same  rivalries  that  preceded  1914  are  more  active  in  the 
world  to-day  than  ever  before.  Hence  the  possibilities  of 
war  are  greater  by  exactly  that  amount.  The  imperial 
struggle  is  being  continued  and  a  part  of  the  imperial 
struggle  is  war. 

8.  Again! 

This  monstrous  thing  called  war  will  occur  again!  Not 
because  any  considerable  number  of  people  want  it,  not 
even  because  an  active  minority  wills  it,  but  because  the 
present  system  of  competitive  capitalism  makes  war  in- 
evitable. Economic  rivalries  are  the  basis  of  modem  wars 
and  economic  rivalries  are  the  warp  and  woof  of  capitalism. 


242  THE  AMERICAN  EMPIRE 

To-day  the  rivalries  are  economic — in  the  fields  of  com- 
merce and  industry  and  finance.  To-morrow  they  will  be 
military. 

Already  the  nations  have  begun  the  competition  in  the 
building  of  tanks,  battleships  and  airplanes.  These  in- 
struments of  destruction  are  built  for  use,  and  when  the 
time  comes,  they  will  be  used  as  they  were  between  1914 
and  1918. 

Again  there  will  be  the  war  propaganda — subtle  at  first, 
then  more  and  more  open.  There  will  be  stories  of  atroc- 
ities; threats  of  world  conquest.  "Preparedness"  will  be 
the  cry. 

Again  there  will  be  the  talk  of  "My  country,  right  or 
wrong";  "Stand  behind  the  President";  "FaU  in  line"; 
"Go  over  the  top!" 

Again  fear  will  stalk  through  the  land,  while  hate  and 
war  lust  are  whipped  into  a  frenzy. 

Again  there  will  be  conscription,  and  the  straightest 
and  strongest  of  the  young  men  will  leave  their  homes  and 
join  the  colors. 

Again  the  most  stalwart  men  of  the  nations  will  "dig 
themselves  in ' '  and  slaughter  one  another  for  years  on  end. 

Again  the  truth-tellers  will  be  mobbed  and  jailed  and 
lynched,  while  those  who  champion  the  cause  of  the 
workers  will  be  served  with  injunctions  if  they  refuse  to 
sell  out  to  the  masters. 

Again  the  profiteers  will  stop  at  home  and  reap  their 
harvests  out  of  the  agony  and  the  blood  of  the  nation. 

Again,  when  the  killing  is  over,  a  few  old  men,  sitting 
around  a  table,  will  carve  tlie  world — stripping  the 
vanquished  while  they  reward  the  victors. 

Again  the  preparations  will  begin  for  the  next  war. 
The  people  will  be  fed  on  promises,  phrases  and  lies. 
They  will  pay  and  they  will  die  for  the  benefit  of  their 
masters,  and  thus  the  terrible  tragedy  of  imperialism  will 
continue  to  bathe  the  world  in  tears  and  in  blood. 


THE  AMERICAN  EMPIRE  243 

XVIII.     THE  CHALLENGE  TO  IMPERIALISM 

1.  Revolutionary  Protest 

Since  the  Franco-Prussian  War  the  people  of  Europe 
have  been  waking  up  to  the  failure  of  imperialism.  The 
period  has  been  marked  by  a  rapid  growth  of  Socialism 
on  the  continent  and  of  trade-unionism  in  Great  Britain. 
Both  movements  are  expressions  of  an  increasing  working- 
class  solidarity ;  both  voice  the  sentiments  of  international- 
ism that  were  sounded  so  loudly  during  the  revolutionary 
period  of  the  eighteenth  century. 

The  rapid  growth  of  the  European  labor  movement 
worried  the  autocrats  and  imperialists.  Bismarck  sup- 
pressed it;  the  Russian  police  tortured  it.  Despite  all  of 
the  efforts  to  check  it  or  to  crush  it,  the  revolutionary 
movement  in  Europe  gained  force.  The  speeches  and  writ- 
ings of  the  leaders  were  directed  against  the  capitalist 
system,  and  the  rank  and  file  of  the  workers,  rendered 
sharply  class  conscious  by  the  traditions  of  class  rule,  re- 
sponded to  the  appeal  by  organizing  new  forms  of  protest. 

The  first  revolutionary  wave  of  the  twentieth  century 
broke  in  Russia  in  1905.  The  Russian  Revolution  of  1917 
destroyed  the  old  regime  and  replaced  it  first  by  a  moderate 
or  liberal  and  then  by  a  radical  communist  control.  Like 
all  of  the  proletarian  movements  in  Europe  the  Russian 
revolutionary  movement  was  directed  against ' '  capitalism ' ' 
and  "imperialism"  and  despite  the  fact  that  there  was 
no  considerable  development  of  the  capitalist  system  in 
Russia,  its  imperial  organization  was  so  thoroughgoing, 
and  the  imperial  attitude  toward  the  working  class  had 
been  so  brutally  revealed  during  the  revolutionary  demon- 
strations in  1905,  that  the  people  reacted  with  a  true 
Slavic  intensity  against  the  despotism  that  they  knew, 
which  was  that  of  an  autocratic,  feudal  master-class. 


244  THE  AMERICAN  EMPIRE 


The  international  doctrines  of  the  new  Russian  regime 
were  expressed  in  the  phrase  "no  forcible  annexations, 
no  punitive  indemnities,  the  free  development  of  all  peo- 
ples." The  keynote  of  its  internal  policy  is  contained  in 
Section  16  of  the  Russian  Constitution,  which  makes  work 
the  duty  of  every  citizen  of  the  Republic  and  proclaims 
as  the  motto  of  the  new  government  the  doctrine,  ' '  He  that 
will  not  work  neither  shall  he  eat."  The  franchise  is  re- 
stricted. Only  workers  (including  housekeepers)  are  per- 
mitted to  vote.  Profiteers  and  exploiters  are  specifically 
denied  the  right  to  vote  or  to  hold  office.  Resources  are 
nationalized  together  with  the  financial  and  industrial 
machinery  of  Russia.  The  Bill  of  Rights  contained  in  the 
first  section  of  the  Russion  Constitution  is  a  pronounce- 
ment in  favor  of  the  liberty  of  the  workers  from  every 
form  of  exploitation  and  economic  oppression. 

The  Russian  revolution  was  directed  against  capitalism 
in  Russia  and  against  imperialism  everywhere.  This 
dramatic  assault  upon  capitalist  imperialism  centered  the 
eyes  of  the  world  upon  Russia,  making  her  experiment 
the  outstanding  feature  of  a  period  during  which  the 
workers  were  striving  to  realize  the  possibilities  of  a  more 
abundant  life  for  the  masses  of  mankind. 


2.  Outlawing  Bolshevism 

Capitalist  diplomats  were  wary  of  the  Korensky  regime 
because  they  did  not  feel  certain  how  far  the  Russian  peo- 
ple intended  to  go.  The  triumph  of  the  Bolsheviki  made 
the  issue  unmistakably  clear.  There  could  be  no  peace  be- 
tween Bolshevism  and  capitalism.  From  that  day  forward 
it  was  a  struggle  to  determine  which  of  the  two  economic 
systems  should  survive. 

During  the  years  1918  and  1919  the  capitalist  world 
organized  one  of  the  most  effective  advertising  campaigns 
that  has  ever  been  staged.  Every  shred  of  evidence  that, 
by  any  stretch  of  the  imagination,  could  be  distorted  into 
an  attack  upon  the  Bolshevist  regime,  was  scattered  broad- 


THE  AMERICAN  EMPIRE  245 


cast  over  the  world.  "Wliere  evidence  was  lacking,  rumor 
and  innuendo  were  employed.  The  leading  newspapers 
and  magazines,  prominent  statesmen,  educators,  clergymen, 
scientists  and  public  men  in  every  walk  of  life  went  out 
of  their  way  to  denounce  the  Russian  experiment  in  very 
much  the  same  manner  that  the  propertied  interests  of 
Europe  had  denounced  the  French  experiment  during  the 
years  that  followed  1789. 

All  of  the  great  imperialist  governments  had  at  their  dis- 
posal a  vast  machinery  for  the  purveying  of  information — ■ 
false  or  true  as  the  case  might  demand.  Tliis  public  ma- 
chinery like  the  machinery  of  private  capitalism  was 
turned  against  Bolshevism.  The  capitalist  governments 
went  farther  by  backing  with  money  and  supplies  the 
counter  revolutionary  forces  under  Yudenich,  Denekine, 
Seminoff,  and  Kolchak.  Allied  expeditions  were  landed 
on  the  soil  of  European  and  Asiatic  Russia  "to  free  the 
Russian  people  from  the  clutches  of  the  Bolsheviki."  A 
blockade  was  declared  in  which  the  Germans  were  in- 
vited to  join  (after  the  signing  of  the  armistice),  and 
the  whole  capitalist  world  united  to  starve  into  submission 
the  men,  women  and  children  of  revolutionary  Russia. 

No  event  of  recent  times,  not  even  the  holy  war  against 
the  autocracy  of  militarist  Germany,  had  created  such  a 
unanimity  of  action  among  the  Western  nations.  Bolshe- 
vism threatened  the  very  existence  of  capitalism  and  as 
such  its  destruction  became  the  first  task  of  the  capitalist 
world. 

The  collapse  of  the  capitalist  efforts  to  destroy  socialist 
Russia  reflects  the  power  of  a  new  idea  over  the  ancient 
form.  The  Allied  expeditions  into  Russia  met  with  hos- 
tility instead  of  welcome.  The  counter-revolutionary 
forces  were  overwhelmed  by  the  red  army.  The  buffer 
states  made  peace.  The  Allied  soldiers  mutinied  when 
called  upon  to  take  part  in  a  war  against  the  forces  of 
revolutionary  Russia.  "Holy  Russia"  became  holy  Russia 
indeed — recognized  and  respected  by  the  proletarian  forces 
throughout  Europe, 


246  THE  AMERICAN  EMPIRE 


3.  The  New  Europe 

Russia  is  the  dramatic  center  of  tlie  European  movement 
against  capitalist  imperialism,  but  the  movement  is  not 
confined  to  Russia.  Its  activities  are  extended  into  every 
important  country  on  the  continent. 

Since  March,  1917,  when  the  first  revolution  occurred 
in  Russia,  absolute  monarchy  and  divine,  kingly  rights 
have  practically  disappeared  from  Europe.  Before  the 
Russian  Revolution,  four-fifths  of  the  people  of  Europe 
were  under  the  sway  of  monarchs  who  exercised  dictatorial 
power  over  the  domestic  and  foreign  affairs  of  their  re- 
spective nations.  Within  two  years,  the  Hohenzollems,  the 
Hapsburgs  and  the  Romanoffs  were  driven  from  the 
thrones  of  Germany,  of  Austria  and  of  Russia.  Other 
rulers  of  lesser  importance  followed  in  their  wake,  until 
to-day,  the  old  feudal  power  that  held  the  political  control 
over  most  of  Europe  in  1914  has  practically  disappeared. 

This  is  the  obvious  thing — a  revolution  in  the  form  of 
political  government — the  kind  of  revolution  with  which 
history  usually  deals. 

But  there  is  another  revolution  proceeding  in  Europe, 
far  more  important  because  more  fundamental — ^the  eco- 
nomic and  social  revolution;  ,the  change  in  the  form  of 
breadwinning ;  the  change  in  the  relation  between  a  man 
and  the  tools  that  he  uses  to  earn  his  livelihood. 

Every  one  knows,  now,  that  Czars  and  Kaisers  and  Em- 
perors did  not  really  control  Europe  before  1914,  except 
in  so  far  as  they  yielded  to  bankers  and  to  business  men. 
The  crovim  and  the  scepter  gave  the  appearance  of  power, 
but  behind  them  were  concessions,  monopolies,  economic 
preferments,  and  special  privilege.  The  European  revolu- 
tion that  began  in  1917  with  the  Czar,  did  not  stop  with 
kings.  It  began  with  them  because  they  were  in  such  plain 
sight,  but  when  it  had  finished  with  them  it  went  right  on 
to  the  bankers  and  the  business  men. 


THE  AMERICAN  EMPIRE  247 


War  is  destruction,  organized  and  directed  by  the  best 
brains  available.  It  is  merry  sport  for  the  organizers  and 
for  some  of  the  directors,  but  like  any  other  destructive 
agent,  it  may  get  out  of  hand.  The  War  of  1914  was  to 
last  for  six  weeks.  It  dragged  on  for  five  years,  and  the 
wars  that  have  grown  out  of  it  are  still  continuing.  In 
the  course  of  those  five  years,  the  war  destroyed  the  capi- 
talist system  of  continental  Europe.  Patches  and  shreds 
of  it  remained,  but  they  were  like  the  topless,  shattered 
trees  on  the  scarred  battle-fields.  They  were  remnants — 
nothing  more.  In  the  first  place,  the  war  destroyed  the 
confidence  of  the  people  in  the  capitalist  system;  in  the 
second  place,  it  smashed  up  the  political  machinery  of 
capitalism;  in  the  third  place,  it  weakened  or  destroyed 
the  economic  machinery  of  capitalism. 

Each  government,  to  win  the  war,  lied  to  its  people. 
They  were  told  that  their  country  was  invaded.  They  were 
assured  that  the  war  would  be  a  short  affair.  Besides  that, 
there  were  various  reasons  given  for  the  struggle — it  was  a 
war  to  end  war ;  it  was  a  war  to  break  the  iron  ring  that 
was  crushing  a  people;  it  was  a  war  for  liberty;  it  was  a 
struggle  to  make  the  world  safe  for  democracy. 

Not  a  single  important  promise  of  the  war  was  fulfilled, 
save  only  the  promise  of  victory.  Hundreds  of  millions, 
aroused  to  the  heights  of  an  exalted  idealism,  came  back  to 
earth  only  to  find  themselves  betrayed.  With  less  promise 
and  more  fulfillment ;  with  at  least  an  appearance  of  states- 
manship ;  with  some  respect  for  the  simple  moralities  of 
truth-telling,  fair-dealing,  and  common  honor,  there  might 
have  been  some  chance  for  the  capitalist  system  to  retain 
the  confidence  of  the  peoples  of  war-torn  Europe,  even  in 
the  face  of  the  Russian  Revolution;  but  each  of  these 
things  was  lacking,  and  as  one  worker  put  it:  "I  don't 
know  what  Bolshevism  is,  but  it  couldn't  be  any  worse  than 
what  we  have  now,  so  I  'm  for  it ! " 

Such  a  loss  of  public  confidence  would  have  proved  a 
serious  blow  to  any  social  system,  even  were  it  capable  of 
immediately    reestablishing    normal    conditions    of    living 


248  THE  AMERICAN  EMPIRE 


among  the  people.  In  this  ease,  the  same  events  that  de- 
stroyed public  confidence  in  the  capitalist  system,  destroyed 
the  system  itself. 

The  old  political  forms  of  Europe — the  czars,  emperors 
and  kaisers,  who  stood  as  the  visible  symbols  of  established 
order  and  civilization,  were  overthrown  during  the  war. 
The  economic  forces — the  banks  and  business  men — ^had 
used  these  forms  for  the  promotion  of  their  business  enter- 
prises. Capitalism  depended  on  czars  and  kaisers  as  a 
blacksmith  depends  on  his  hammer.  They  were  among  the 
tools  with  wliich  business  forged  the  chains  of  its  power. 
They  were  the  political  side  of  the  capitalist  system. 
While  the  people  accepted  them  and  believed  in  them,  the 
business  interests  were  able  to  use  these  political  tools  at 
will.  The  tools  were  destroyed  in  the  fierce  pressure  of 
war  and  revolution,  and  with  them  went  one  of  the  chief 
assets  of  the  European  capitalists. 

There  was  a  third  breakdown — far  more  important  than 
the  break  in  the  political  machinery  of  the  capitalist  system 
— and  that  was  the  annihilation  of  the  old  economic  life. 

Economic  life  is,  in  its  elements,  very  simple.  Raw  ma- 
terials— iron  ore,  copper,  cotton,  petroleum,  coal  and  wheat 
— are  converted,  by  some  process  of  labor,  into  things  that 
feed,  clothe  and  house  people.  There  are  four  stages  in 
this  process — raw  materials;  manufacturing;  transporta- 
tion; marketing.  If  there  is  a  failure  in  one  of  the  four, 
all  of  the  rest  go  wrong,  as  is  very  clearly  illustrated  when- 
ever there  is  a  great  miners'  or  railroad  workers'  strike, 
or  when  there  is  a  failure  of  a  particular  crop.  During 
the  war,  all  four  of  these  economic  stages  went  wrong. 

Between  the  years  1914  and  1918  the  people  of  Europe 
busied  themselves  mth  a  war  that  put  their  economic  ma- 
chine out  of  the  running. 

For  a  hundred  years  the  European  nations  had  been  busy 
building  a  finely  adjusted  economic  mechanism;  popula- 
tion, finance,  commerce — all  were  knit  into  the  same  system. 
This  system  the  war  demolished,  and  the  years  that  have 


THE  AMERICAN  EMPIRE  249 


followed  the  Armistice  have  not  seen  it  rebuilt  in  any  es- 
sential particular,  save  in  Great  Britain  and  in  some  of  the 
neutral  countries. 

Not  only  were  the  European  nations  unable  to  give  com- 
modities in  exchange  for  the  things  they  needed  but  the 
machinery  of  finance,  by  means  of  which  these  transactions 
were  formerly  facilitated,  was  crippled  almost  beyond  re- 
pair. Under  the  old  system  buying  and  selling  were 
carried  on  by  the  use  of  money,  and  money  ceased  to  be 
a  stable  medium  of  exchange  in  Europe.  It  would  be  more 
correct  to  say  that  money  was  no  longer  taken  seriously  in 
many  parts  of  Europe.  During  the  war  the  European 
governments  printed  75  billions  of  dollars'  worth  of  paper 
money.  This  paper  depreciated  to  a  ridiculous  extent. 
Before  the  war,  the  franc,  the  lira,  the  mark  and  the  cro^vn 
had  about  the  same  value — 20  to  23  cents,  or  about  five  to 
a  dollar.  By  1920  the  dollar  bought  15  francs;  23  liras; 
40  marks,  and  250  Austrian  croAvns.  In  some  of  the  ready- 
made  countries,  constituted  under  the  Treaty  or  set  up  by 
the  Allies  as  a  cordon  about  Russia,  hundreds  and  thou- 
sands of  crowns  could  be  had  for  a  dollar.  Even  the 
pound  sterling,  which  kept  its  value  better  than  the  money 
of  any  of  the  other  European  combatants,  was  thirty  per 
cent,  below  par,  when  measured  in  terms  of  dollars.  This 
situation  made  it  impossible  for  the  nations  whose  money 
was  at  such  a  heavy  discount  to  purchase  supplies  from 
the  more  fortunate  countries.  But  to  make  matters  even 
worse,  the  rate  of  exchange  fluctuated  from  day  to  day 
and  from  hour  to  hour  so  that  busine.ss  transactions  could 
only  be  negotiated  on  an  immense  margin  of  safety. 

Add  to  this  financial  dissolution  the  mountains  of  debt, 
the  huge  interest  charges  and  the  oppressive  taxes,  and  the 
picture  of  economic  ruin  is  complete. 

The  old  capitalist  world,  organized  on  the  theory  of 
competition  between  the  business  men  within  each  nation, 
and  between  the  business  men  of  one  nation  and  those  of 
another  nation,  reached  a  point  Avhero  it  would  no  longer 
work. 


250  THE  AMERICAN  EMPIRE 


In  Russia  the  old  system  had  disappeared,  and  a  new 
system  had  been  set  up  in  its  place.  In  Germany,  and 
throughout  central  Europe,  the  old  system  was  shattered, 
and  the  new  had  not  yet  emerged.  In  France,  Italy  and 
Great  Britain  the  old  system  was  in  process  of  disintegra- 
tion— rapid  in  France  and  Italy;  slower  in  Great  Britain. 
But  in  all  of  these  countries  intelligent  men  and  women 
were  asking  the  only  question  that  statesmanship  could  ask 
— the  question,  * '  What  next  ? ' ' 

The  capitalist  system  was  stronger  in  Great  Britain  than 
in  any  of  the  other  warring  countries  of  Europe.  Before 
the  war,  it  rested  on  a  surer  foundation.  During  the  war, 
it  withstood  better  than  any  other  the  financial  and  indus- 
trial demands.  Since  the  war,  it  has  made  the  best  i-e- 
covery. 

Great  Britain  is  the  most  successful  of  the  capitalist 
states.  The  other  capitalist  nations  of  Europe  regard  her 
as  the  inner  citadel  of  European  capitalism.  The  British 
Labor  Movement  is  seeking  to  take  this  citadel  from  within. 

The  British  Labor  Movement  is  a  formidable  affair. 
There  are  not  more  than  a  hundred  thousand  members  in 
all  of  the  Socialist  parties,  in  the  Independent  Labor  Party 
and  in  the  Communist  Party  combined.  There  are  between 
six  and  seven  millions  of  members  in  the  trade  unions. 

Perhaps  the  best  test  of  the  strength  of  the  British  Labor 
Movement  came  in  the  summer  of  1920,  over  the  prospec- 
tive war  with  Russia.  "Warsaw  was  threatened.  Its  fall 
seemed  imminent,  and  both  Millerand  and  Lloyd-George 
made  it  clear  that  the  fall  of  "Warsaw  meant  war.  The 
situation  developed  with  extraordinary  rapidity.  It  was 
reported  that  the  British  Government  had  dispatched  an 
ultimatum.  The  Labor  Movement  acted  with  a  strength 
and  precision  that  swept  the  Government  off  its  feet  and 
compelled  an  immediate  reversal  of  policy. 

Over  night,  the  workers  of  Great  Britain  were  united  in 
the  Council  of  Action.  As  originally  constituted,  the 
** Labor  and  Russia  Council  of  Action"  consisted  of  five 


THE  AMERICAN  EMPIRE  251 


representatives  each  from  the  Parliamentary  Committee  of 
the  Trades  Union  Congress,  the  Executive  Committee  of  the 
Labor  Party  and  the  Parliamentary  Labor  Party.  To 
these  fifteen  were  added  eight  others,  among  whom  were 
representatives  of  every  element  in  the  British  Labor 
Movement.  This  Council  of  Action  did  three  things — it 
notified  the  Government  that  there  must  be  no  war  with 
Russia;  it  organized  meetings  and  demonstrations  in  every 
corner  of  the  United  Kingdom  to  formulate  public  opinion ; 
it  began  the  organization  of  local  councils  of  action,  of 
which  there  were  three  hundred  within  four  weeks.  The 
Council  of  Action  also  called  a  special  conference  of  the 
British  Labor  Movement  which  met  in  London  on  August 
13.  There  were  over  a  thousand  delegates  at  this  confer- 
ence, which  opened  and  closed  with  the  singing  of  the 
"Internationale."  "When  the  principal  resolution  of  en- 
dorsement was  passed,  approving  the  formation  of  the 
Council  of  Action,  the  delegates  rose  to  their  feet,  cheered 
the  move  to  the  echo,  and  sang  the  ''Internationale"  and 
**The  Red  Flag."  The  closing  resolution  authorized  the 
Council  of  Action  to  take  ' '  any  steps  that  may  be  necessary 
to  give  effect  to  the  decisions  of  the  Conference  and  the 
declared  policy  of  the  Trade  Union  and  Labor  Movement. ' ' 

Such  was  the  position  in  the  "Citadel  of  European 
Capitalism."  The  Government  was  forced  to  deal  with  a 
body  that,  for  all  practical  purposes,  was  determining  the 
foreign  policy  of  the  Empire.  Behind  that  Council  was  an 
organized  group  of  between  six  and  seven  millions  of 
workers  who  were  out  to  get  the  control  of  industry  into 
their  own  hands,  and  to  do  it  as  speedily  and  as  effectually 
as  circumstances  would  permit. 

Meanwhile,  the  mantle  of  revolutionary  activity  de- 
scended upon  Italy,  where  the  red  flag  was  run  up  over 
some  the  largest  factories  and  some  of  the  finest  estates. 

Throughout  the  war,  the  revolutionary  movement  was 
strong  in  Italy.  The  Socialist  Party  remained  consistently 
an  anti-war  party,  with  a  radical  and  vigorous  propaganda. 
The  Armistice  found  the  Socialist  and  Labor  Movements 


252  THE  AMERICAN  EMPIRE 


strong  in  the  North,  with  a  growing  movement  in  the  South 
for  the  organization  of  Agricultural  Leagues. 

The  Socialist  propaganda  in  Italy  was  very  consistent 
and  telling.  The  paper  "Avanti,"  circulating  in  all  parts 
of  the  country,  was  an  agency  of  immense  imx:»ortance. 
The  war,  the  Treaty,  the  rising  cost  of  living,  the  growing 
taxation — all  had  prepared  the  ground  for  the  work  that 
the  propagandists  were  doing.  Their  message  was: 
"Make  ready  for  the  taking  over  of  the  industries !  Learn 
what  you  can,  so  that,  when  the  day  comes,  each  will  play 
his  part.  When  you  get  the  word,  take  over  the  works ! 
There  must  be  no  violence — that  only  helps  the  other  side. 
Do  not  linger  on  the  streets,  you  will  be  shot.  Remain  at 
home  or  stay  in  the  factories  and  work  as  you  never  worked 
before ! ' ' 

That,  in  essence,  was  the  Italian  Socialist  propaganda — 
simple,  clear  and  direct,  and  that  was,  in  effect,  what  the 
workers  did. 

The  returned  soldiers  were  a  factor  of  large  importance 
in  the  Italian  Revolution.  They  were  radicals  throughout 
the  war.  The  peace  made  them  revolutionists.  ' '  The  Pro- 
letarian League  of  the  Great  War ' '  was  affiliated  with  ' '  The 
International  of  Former  Soldiers,"  which  comprised  the 
radical  elements  among  the  ex-service  men  of  Great  Britain, 
Germany,  France,  Austria,  Italy  and  a  number  of  the 
smaller  countries.  There  were  over  a  million  dues-paying 
members  in  this  International,  and  their  avowed  object  was 
propaganda  against  war  and  in  favor  of  an  economic  system 
in  which  the  workers  control  the  industries.  It  was  this 
group  in  Italy — particularly  in  the  South — that  carried 
through  the  project  of  occupying  the  estates. 

The  workers  are  in  control  of  the  whole  social  fabric 
in  Russia  where  the  revolution  has  gone  the  farthest.  In 
Great  Britain,  where  the  labor  movement  is  pcrliaps  more 
conservative  than  in  any  of  tlie  other  countries  of  Europe, 
the  Government  is  compellcMl  to  deal  with  a  labor  move- 
ment that  is  strong  enough  to  consider  and  to  decide  im- 


THE  AMERICAN  EMPIRE  253 


portant  matters  of  foreign  policy.  The  workers  of  Italy 
have  the  upper  hand.  In  Czecho-Slovakia,  in  Bulgaria,  in 
Germany  and  in  the  smaller  and  neutral  countries  the 
workers  are  making  their  voices  heard  in  opposition  to  any 
restoration  of  the  capitalist  system ;  while  they  busy  them- 
selves with  the  task  of  creating  the  framework  of  a  new 
society. 

4.  The  Challenge 

This  is  the  challenge  of  the  workers  of  Europe  to  the 
capitalist  system.  The  workers  are  not  satisfied ;  they  are 
questioning.  They  mean  to  have  the  best  that  life  has  to 
give,  and  they  are  convinced  that  the  capitalist  system  has 
denied  it  to  them. 

The  world  has  had  more  than  a  century  of  capitalism. 
The  workers  have  had  ample  opportunity  to  see  the  system 
at  work.  The  people  of  all  the  great  capitalist  countries — 
the  common  people — ^liave  borne  the  burdens  and  felt  the 
crushing  weight  of  capitalism — in  its  enslavement  of  little 
children;  in  its  underpaying  of  women;  in  long  hours  of 
unremitting,  monotonous  toil;  in  the  dreadful  housing; 
in  the  starvation  wages ;  in  unemplojonent ;  in  misery.  The 
capitalist  system  has  had  a  trial  and  it  is  upon  the  workers 
that  the  system  has  been  tried  out. 

During  this  experiment,  the  workers  of  the  world  have 
been  compelled  to  accept  poverty,  unemployment  and  war. 

These  terrible  scourges  have  afiflicted  the  capitalist  world, 
and  it  is  the  workers  and  their  families  that  have  borne 
them  in  their  own  persons.  In  those  countries  where  the 
capitalist  system  is  the  oldest,  the  workers  have  suffered 
the  longest.  The  essence  of  capitalism  is  the  exploitation 
of  one  man  by  another  man,  and  the  longer  this  exploita- 
tion is  practiced  the  more  skillful  and  effective  does  the 
master  class  become  in  its  manipulation. 

The  workers  look  before  them  along  the  path  of  capi- 
talist imperialism  that  is  now  being  followed  by  the  na- 
tions that  are  in  the  lead  of  the  capitalist  world.    There 


254  THE  AMERICAN  EMPIRE 


they  see  no  promise  save  the  same  exploitation,  the  same 
poverty,  the  same  inequality  and  the  same  wars  over  the 
commercial  rivalries  of  the  imperial  nations. 

The  workers  of  Europe  have  come  to  the  conclusion  that 
the  world  should  belong  to  those  who  build  it;  that  the 
good  things  of  life  should  be  the  property  of  those  who 
produce  them.  They  see  only  one  course  open  before  them 
— to  declare  that  those  who  will  not  work,  shall  not  eat. 

The  right  of  self-determination  is  the  international  ex- 
pression of  this  challenge.  The  ownership  of  the  job  is  its 
industrial  equivalent.  Together,  the  two  ideas  comprise 
the  program  of  the  more  advanced  workers  in  all  of  the 
great  imperial  countries  of  the  world.  These  ideas  did  not 
originate  in  Russia,  and  they  are  not  confined  to  Russia 
any  more  than  capitalism  is  confined  to  Great  Britain. 
They  are  the  doctrines  of  the  new  order  that  is  coming 
rapidly  into  its  own. 

Capitalism  has  been  summed  up,  heretofore,  in  the  one 
word  "profit."  The  capitalist  cannot  abandon  that  stand- 
ard. The  world  has  lived  beyond  it,  however,  and  with- 
out it,  capitalism,  as  a  system,  is  meaningless.  If  the  capi- 
talists abandon  profit,  they  abandon  capitalism. 

Without  profit  the  capitalist  system  falls  to  pieces,  be- 
cause it  is  the  profit  incentive  that  has  always  been  consid- 
ered as  the  binder  that  holds  the  capitalist  world  together. 
Hence  the  abandonment  of  the  profit  incentive  is  the  sur- 
render of  the  citadel  of  capitalism.  While  profit  remains, 
exploitation  persists,  and  while  there  is  exploitation  of  one 
man  by  another,  no  human  being  can  call  himself  free. 

The  capitalists  are  caught  in  a  beleaguered  fortress  in 
which  they  are  defending  their  economic  lives.  Profit  is 
the  key  to  this  fortress,  and  if  they  surrender  the  key,  they 
are  lost. 

5.  The  Real  Struggle 

This  is  the  real  struggle  for  the  possession  of  the  earth. 
Shall  the  few  own  and  the  many  labor  for  the  few,  or  the 
many  own,  and  labor  upon  jobs  that  they  themselves  pos- 


THE  AMERICAN  EMPIRE  255 


sess?  The  struggle  between  the  capitalist  nations  is  inci- 
dental. The  struggle  between  the  owners  of  the  world  and 
the  workers  of  the  world  is  fundamental. 

If  Great  Britain  wins  in  her  conflict  with  the  United 
States,  her  capitalists  will  continue  to  exploit  the  workers 
of  Lancashire  and  Delhi.  Her  imperialists  will  continue 
their  policy  of  world  domination,  subjugating  peoples  and 
utilizing  their  resources  and  their  labor  for  the  enrichment 

If  the  United  States  wins  in  her  struggle  with  Great 
of  the  bankers  and  traders  of  London. 
Britain,  her  capitalists  will  continue  to  exploit  the  workers 
of  Pittsburg  and  San  Juan.  Her  imperialists  will  continue 
their  policy  of  world  domination,  subjugating  the  peoples 
of  Latin  American  first,  and  then  reaching  out  for  the  con- 
trol over  other  parts  of  the  earth. 

No  matter  what  imperial  nation  may  triumph  in  this 
struggle  between  the  great  nations  for  the  right  to  exploit 
the  weaker  peoples  and  the  choice  resources,  the  struggle 
between  capitalism  and  Socialism  must  be  fought  to  a  fin- 
ish. If  the  capitalists  win,  the  world  will  see  the  introduc- 
tion of  a  new  form  of  serfdom,  more  complete  and  more 
effective  than  the  serfdom  of  Feudal  Europe.  If  the  So- 
cialists win,  the  world  enters  upon  a  new  cycle  of  develop- 
ment. 


256  THE  AMERICAN  EMPIRE 


XIX.     THE  AMERICAN  WORKER  AND  WORLD 
EMPIRE 

1.  Gains  and  Losses 

The  American  worker  is  a  citizen  of  the  richest  country 
of  the  world.  Resources  are  abundant.  There  is  ample 
machinery  to  convert  these  gifts  of  nature  into  the  things 
that  men  need  for  their  food  and  clothing,  their  shelter, 
their  education  and  their  recreation.  There  is  enough  for 
all,  and  to  spare,  in  the  United  States. 

But  the  American  worker  is  not  master  of  his  own  des- 
tinies. He  must  go  to  the  owners  of  American  capital — to 
the  plutocrats — and  from  them  he  must  secure  the  permis- 
sion to  earn  a  living ;  he  must  get  a  job.  Therefore  it  is  the 
capitalists  and  not  the  workers  of  the  United  States  that 
are  deciding  its  public  policy  at  the  present  moment. 

The  American  capitalist  is  a  member  of  one  of  the  most 
powerful  exploiting  groups  in  the  world.  Behind  him  are 
the  resources,  productive  machinery  and  surplus  of  the 
American  Empire.  Before  him  are  the  undeveloped  re- 
sources of  the  backward  countries.  He  has  gained  wealth 
and  power  by  exploitation  at  home.  He  is  destined  to 
grow  still  richer  and  more  powerful  as  he  extends  his  or- 
ganization for  the  purposes  of  exploitation  abroad. 

The  prospects  of  world  empire  are  as  alluring  to  the 
American  capitalist  as  have  been  similar  prospects  to  other 
exploiting  classes  throughout  history.  Empire  has  always 
been  meat  and  drink  to  the  rulers. 

The  master  class  has  much  to  gain  through  imperialism. 
The  workers  have  even  more  to  lose. 

The  workers  make  up  the  great  bulk  of  the  American 
people.  Fully  seven-eighths  (perhaps  nine-tenths)  of  the 
adult  inhabitants  of  the  United  States  are  wage  earners, 


THE  AMERICAN  EMPIRE  257 


clerks  and  working  farmers.  All  of  tlie  proprietors,  offi- 
cials, managers,  directors,  merchants  (big  and  little),  law- 
yers, doctors,  preachers,  teachers,  and  the  remainder  of  the 
business  and  professional  classes  constitute  not  over  10  or 
12  percent  of  the  total  adult  population.  The  workers  are 
the  "plain  people"  who  do  not  build  empires  any  more 
than  they  make  wars.  If  they  were  left  to  themselves, 
they  would  continue  the  pursuit  of  their  daily  affairs  which 
takes  most  of  their  thought  and  energy — and  be  content  to 
let  their  neighbors  alone. 


2.  The  Workers'  Business 

The  mere  fact  that  the  workers  are  so  busy  with  the 
routine  of  daily  life  is  in  itself  a  guarantee  that  they  will 
mind  their  own  business.  The  average  worker  is  engaged, 
outside  of  working  hours,  with  the  duties  of  a  family.  His 
wife,  if  she  has  children,  is  thus  employed  for  the  greater 
portion  of  her  time.  Both  are  far  too  preoccupied  to  in- 
terfere with  the  like  acts  of  other  workers  in  some  other 
portion  of  the  world.  Furthermore,  their  preoccupation 
with  these  necessary  tasks  gives  them  sympathy  with  those 
similarly  at  work  elsewhere. 

The  plain  people  of  any  country  are  ready  to  exercise 
even  more  than  an  ordinary  amount  of  forbearance  and 
patience  rather  than  to  be  involved  in  warfare,  which  wipes 
out  in  a  fortnight  the  advantages  gained  through  years 
of  patient  industry. 

The  workers  have  no  more  to  gain  from  empire  building 
than  they  have  from  war  making,  but  they  pay  the  price 
of  both.  Empire  building  and  war  making  are  Siamese 
twins.  They  are  so  intimately  bound  together  that  they 
cannot  live  apart.  The  empire  builder — engaged  in  con- 
quering and  appropriating  territory  and  in  subjugating 
peoples — ^must  have  not  only  the  force  necessary  to  set  up 
the  empire,  but  also  the  force  requisite  to  maintain  it. 
Battleships  and  army  corps  are  as  essential  to  empires  as 


258  THE  AMERICAN  EMPIRE 


mortar  is  to  a  brick  wall.     They  are  the  expression  of  the 
organized  might  by  which  the  empire  is  held  together. 

The  plain  people  are  the  bricks  which  the  imperial  class 
uses  to  build  into  a  wall  about  the  empire.  They  are  the 
mortar  also,  for  they  man  the  ships  and  fill  up  the  gaps 
in  the  infantry  ranks  and  the  losses  in  the  machine  gun 
corps.  They  are  the  body  of  the  empire  as  the  rulers  are 
its  guiding  spirit. 

Wlien  ships  are  required  to  carry  the  surplus  wealth  of 
the  ruling  class  into  foreign  markets,  the  workers  build 
them.  When  surplus  is  needed  to  be  utilized  in  taking  ad- 
vantage of  some  particularly  attractive  investment  oppor- 
tunity the  workers  create  it.  They  lay  down  the  keels  of 
the  fighting  ships,  and  their  sons  aim  and  fire  the  guns. 
They  are  drafted  into  the  army  in  time  of  war  and  their 
bodies  are  fed  to  the  cannon  which  other  workers  in  other 
countries,  or  perhaps  in  the  same  country,  have  made  for 
just  such  purposes.  The  workers  are  the  warp  and  woof 
of  empire,  yet  they  are  not  the  gainers  by  it.  Quite  the 
contrary,  they  are  merely  the  means  by  which  their  mas- 
ters extend  their  dominion  over  other  workers  who  have 
not  yet  been  scientifically  exploited. 

The  work  of  empire  building  falls  to  the  lot  of  the  work- 
ers. The  profits  of  empire  building  go  to  the  exploiting 
class. 

3.  The  British  Workers 

What  advantage  came  to  the  workers  of  Rome  from  the 
Empire  which  their  hands  shaped  and  which  their  blood 
cemented  together?  Their  masters  took  their  farms,  con- 
verted the  small  fields  into  great,  slave-worked  estates,  and 
drove  the  husbandmen  into  the  alleys  and  tenements  of  the 
city  where  they  might  eke  out  an  existence  as  best  they 
could.  The  rank-and-file  Roman  derived  the  same  advan- 
tage from  the  Roman  Empire  that  the  rank-and-file  Briton 
has  derived  from  the  British  Empire. 


THE  AMERICAN  EMPIRE  259 


Great  Britain  has  exercised  more  world  mastery  during 
the  past  hundred  years  than  any  other  nation.  All  that 
Germany  hoped  to  achieve  Great  Britain  has  realized.  Her 
traders  carry  the  world's  commerce,  her  financiers  clip 
profits  from  international  business  transactions,  her  manu- 
facturers sell  to  the  people  of  every  country,  the  sun  never 
sets  on  the  British  flag. 

Great  Britain  is  the  foremost  exponent  and  practitioner 
of  capitalist  imperialism.  The  British  Empire  is  the  great- 
est that  the  world  has  known  since  the  Empire  of  Rome 
fell  to  pieces.  Whatever  benefits  modern  imperialism 
brings  either  for  capitalists  or  for  workers  should  be  en- 
joyed by  the  capitalists  and  workers  of  Great  Britain. 

Until  the  Great  World  War  the  capitalists  of  Great 
Britain  were  the  most  powerful  on  earth  with  a  larger 
foreign  trade  and  a  larger  foreign  investment  than  any 
other.  At  the  same  time  the  British  workers  were  amongst 
the  worst  exploited  of  those  in  any  capitalist  country  in 
Europe. 

The  entire  nineteenth  century  is  one  long  and  terrible 
record  of  master-class  exploitation  inside  the  British  Isles. 
The  miseries  of  modern  India  have  been  paralleled  in  the 
lives  of  the  workers  of  Ireland,  Scotland,  Wales  and  Eng- 
land. Gibbins,  in  his  description  of  the  conditions  of  the 
child  workers  in  the  early  years  of  the  nineteenth  century 
ends  with  the  remark,  ''One  dares  not  trust  oneself  to  try 
and  set  down  calmly  all  that  might  be  told  of  this  awful 
page  of  the  history  of  industrial  England."  ^ 

Even  more  revolting  are  the  descriptions  of  the  condi- 
tions which  surroiuided  the  lives  of  the  mine  workers  in 
the  early  part  of  the  nineteenth  century.  Women  as  well 
as  men  were  taken  into  the  mines  and  in  some  cases,  as  the 
reports  of  the  Parliamentary  investigation  show,  the 
women  dragged  cars  through  passage-ways  that  were  too 
low  to  admit  the  use  of  ponies  or  mules. 

1  "Industry  in  England,"  H.  deB.  Gibbins.  New  York,  Scribner'a, 
1S97,  p.  390. 


260  THE  AMERICAN  EMPIRE 


England,  mistress  of  the  seas,  proud  carrier  of  the  traf- 
fic of  the  world,  the  center  of  international  finance,  the 
richest  among  all  the  investing  nations — England  was  reek- 
ing with  poverty.  Beside  her  factories  and  warehouses 
were  vile  slums  in  which  people  huddled  as  Ruskin  said, 
"so  many  brace  to  a  garret."  There  in  the  back  alleys 
of  civilization  babies  were  bom  and  babies  died,  while 
those  who  survived  grew  to  the  impotent  manhood  of  the 
street  hooligan. 

The  British  Empire  girdled  the  world.  For  a  century 
its  power  had  grown,  practically  unchallenged.  Super- 
ficially it  had  every  appearance  of  strength  and  permanence 
but  behind  it  and  beneath  it  were  the  hundreds  of  thou- 
sands of  exploited  factory  workers,  the  underpaid  miners, 
the  Cannon  Gate  of  Edinburgh  and  the  Waterloo  Junc- 
tion of  London. 

Capitalist  imperialism  has  not  benefited  the  British 
workers.  Quite  the  contrary,  the  rise  of  the  Empire  has 
been  accompanied  by  the  disappearance  of  the  stalwart 
English  yeoman;  by  the  disappearance  of  the  agricultural 
population;  by  the  concentration  of  the  people  in  huge  in- 
dustrial towns  where  the  workers,  no  longer  the  masters  of 
their  own  destinies,  must  earn  their  living  by  working  at 
machines  owned  by  the  capitalist  imperialists.  The  sur- 
plus derived  from  this  exploited  labor  is  utilized  by  the 
capitalists  as  the  means  of  further  extending  their  power 
in  foreign  lands. 

Imperialism  has  brought  not  prosperity,  but  poverty  to 
the  plain  people  of  England. 

There  is  another  aspect  of  the  matter.  If  these  degraded 
conditions  attach  to  the  workers  in  the  center  of  the  em- 
pire, what  must  be  the  situation  among  the  workers  in 
the  dependencies  that  are  the  objects  of  imperial  exploita- 
tion ?  Let  the  workers  of  India  answer  for  Great  Britain ; 
the  workers  of  Korea  answer  for  Japan,  and  the  workers 
of  Porto  Rico  answer  for  the  United  States.  Their  lot  is 
worse  than  is  the  lot  of  the  workers  at  the  center  of  imperial 
power. 


THE  AMERICAN  EMPIRE  261 


Empires  yield  profits  to  the  masters  and  victory  and 
glory  to  the  workers.  Let  any  one  who  does  not  believe  this 
compare  the  lives  of  the  workers  in  small  countries  like 
Holland,  Norway,  Denmark  and  Switzerland,  with  the  lives 
of  the  workers  in  the  neighboring  empires — Russia,  Ger- 
many, France  and  Great  Britain.  The  advantage  is  all  on 
the  side  of  those  who  live  in.  the  smaller  countries  that  are 
minding  their  own  affairs  and  letting  their  neighbors  alone. 

4.  The  Long  Trail 

The  workers  of  the  United  States  are  to-day  following 
the  lead  of  the  most  powerful  group  of  financial  im- 
perialists in  the  world.  The  trail  is  a  long  one  leading 
to  world  conquest,  unimagined  dizzying  heights  of  world 
power,  riches  beyond  the  ken  of  the  present  generation, 
and  then,  the  slow  and  terrible  decay  and  dissolution  that 
sooner  or  later  overtake  those  peoples  that  follow  the  paths 
of  empire.  The  rulers  will  wield  the  power  and  enjoy  the 
riches.  The  people  will  struggle  and  suffer  and  pay  the 
price. 

The  American  plutocracy  is  out  to  conquer  the  earth  be- 
cause it  is  to  their  interest  to  do  so.  The  will-o'-the-wisp 
of  world  empire  has  captured  their  imaginations  and  they 
are  following  it  blindly. 

The  American  people,  on  November  2,  1920,  gave  the 
American  imperialists  a  blanket  authority  to  go  about  their 
imperial  business — an  authority  that  the  rulers  will  not  be 
slow  to  follow.  First  they  will  clean  house  at  home — 
that  housecleaning  will  be  called  "the  campaign  for  the  es- 
tablishment of  the  open  shop."  Then  they  will  go  into 
Mexico,  Central  America,  China,  and  Europe  in  search  of 
markets,  trade  and  investment  opportunities. 

Behind  the  investment  will  come  the  flag,  carried  by 
battle-ships  and  army  divisions.  That  flag  will  be  brought 
front  to  front  with  other  flags,  high  words  vnll  be  spoken, 
blood  will  flow,  life  will  ebb,  and  the  imperialists  will  win 
their  point  and  pocket  their  profit. 


262  THE  AMERICAN  EMPIRE 


Behind  them,  in  November,  and  at  all  other  times  of  the 
year,  there  will  be  the  will,  expressed  or  implied,  of  the 
working  people  of  the  United  States,  who  will  produce  the 
surplus  for  foreign  investment;  will  make  the  ships  and 
man  them ;  will  dig  the  coal  and  bore  for  the  oil ;  will  shape 
the  machines.  Their  hands  and  the  hands  of  their  sons 
will  be  the  force  upon  which  the  ruling  class  must  depend 
for  its  power.  They  will  produce,  while  the  ruling  class 
consumes  and  destroys. 

The  trail  is  a  long  one,  but  it  leads  none  the  less  cer- 
tainly to  isolation  and  death.  No  people  can  follow  the 
imperial  trail  and  live.  Their  liberties  go  first  and  then 
their  lives  pay  the  penalty  of  their  rulers'  imperial  ambi- 
tion. It  was  so  in  the  German  Empire.  It  is  so  to-day 
in  the  British  Empire.  To-morrow,  if  the  present  course 
is  followed,  it  will  be  equally  true  in  the  American  Empire. 

5.  The  Netv  Germany 

One  of  the  chief  charges  against  the  Germans,  in  1914, 
was  that  they  were  not  willing  to  leave  their  neighbors  in 
peace.  They  were  out  to  conquer  the  world,  and  they 
did  not  care  who  knew  it.  It  was  not  the  German  people 
who  held  these  plans  for  world  conquest,  it  was  the  Ger- 
man ruling  class.  The  German  people  were  quite  willing 
to  stay  at  home  and  attend  to  their  own  affairs.  Their 
rulers,  pushed  by  the  need  for  markets  and  investment  op- 
portunities, and  lured  by  the  possibilities  of  a  world  em- 
pire, were  willing  to  stake  the  lives  and  the  happiness  of 
the  whole  nation  on  the  outcome  of  these  ambitious  schemes. 
They  threw  their  dice  in  the  great  world  game  of  interna- 
tional rivalries — threw  and  lost;  but  in  their  losing,  they 
carried  not  only  their  own  fortunes,  but  the  lives  and  the 
homes  and  the  happiness  of  millions  of  their  fellows  whose 
only  desire  was  to  remain  at  home  and  at  peace. 

Germany's  offense  was  her  ambition  to  gain  at  the  ex- 
pense of  her  neighbors.  Lacking  a  place  in  the  sun,  she 
proposed  to  take  it  by  the  strength  of  her  good  right  arm. 


THE  AJVIERICAN  EMPIRE  263 


This  is  the  method  by  which  all  of  the  great  empires  have 
been  built  and  it  is  the  method  that  the  builders  of  the 
American  Empire  have  followed  up  to  this  point.  The 
land  which  the  ruling  class  of  the  United  States  has  needed 
has  heretofore  been  in  the  hands  of  weak  peoples — Indians, 
Mexicans,  a  broken  Spanish  Empire.  Now,  however,  the 
time  has  come  when  the  rulers  of  the  United  States,  with 
the  greatest  wealth  and  the  greatest  available  resources  of 
any  of  the  nations,  are  preparing  to  take  what  they  want 
from  the  great  nations,  and  that  imperial  purpose  can  be  en- 
forced in  only  one  Avay — by  a  resort  to  arms.  The  rulers 
of  the  United  States  must  take  what  they  would  have  by 
force,  from  those  who  now  possess  it.  They  did  not  hesi- 
tate to  take  Panama  from  Colombia ;  they  did  not  hesitate 
to  take  possession  of  Hayti  and  of  Santo  Domingo,  and 
they  do  not  propose  to  stop  there. 

The  people  of  the  world  know  these  things.  The  in- 
habitants of  Latin  America  know  them  by  bitter  experience. 
The  inhabitants  of  Europe  and  of  Asia  know  them  by 
hearsay.  Both  in  the  West  and  in  the  East,  the  United 
States  is  known  as  ' '  The  New  Germany. ' ' 

That  means  that  the  peoples  of  these  countries  look  upon 
the  United  States  and  her  foreign  policies  in  exactly  the 
same  way  that  the  people  of  the  United  States  were  taught 
to  regard  Germany  and  her  foreign  policies.  To  them  the 
United  States  is  a  great,  rich,  brutal  Empire,  setting  her 
heel  and  laying  her  fist  where  necessity  calls.  Men  and 
women  inside  the  United  States  think  of  themselves  and  of 
their  fellow  citizens  as  human  beings.  The  people  in  the 
other  countries  read  the  records  of  the  lynchings,  the  rob- 
beries and  the  murders  inside  the  United  States;  of  the 
imperial  aggression  toward  Latin  America,  and  they  are 
learning  to  believe  that  the  United  States  is  made  up  of 
ruthless  conquerors  who  work  their  will  on  those  that  cross 
their  path. 

The  plain  American  men  and  women,  living  quietly  in 
their  simple  homes,  are  none  the  less  citizens  of  an  ag- 
gressive,   conquering    Empire.     They    may.  not    have    a 


264  THE  AMERICAN  EMPIRE 


thought  directed  against  the  well-being  of  a  single  human 
creature,  but  they  pay  their  taxes  into  the  public  treasury ; 
they  vote  for  imperialism  on  each  election  day;  they  read 
imperialism  in  their  papers  and  hear  it  preached  in  their 
churches,  and  when  the  call  comes,  their  sons  will  go  to 
the  front  and  shed  their  blood  in  the  interest  of  the  imperial 
class. 

The  plain  people  of  the  German  Empire  did  not  desire 
to  harm  their  fellows,  nevertheless,  they  furnished  the 
cannon-fodder  for  the  Great  War.  America's  plain  folks, 
by  merely  following  the  doctrine,  *'My  country,  right  or 
wrong — America  first!"  will  find  themselves,  at  no  very 
distant  date,  exactly  where  the  German  people  found  them- 
selves in  1914. 

6.  The  Price 

The  historic  record,  in  the  matter  of  empire,  is  uniform. 
The  masters  gain ;  the  workers  pay. 

The  workers  of  the  United  States  will  not  be  exempt 
from  these  inexorable  necessities  of  imperialism.  On  the 
contrary  they  will  be  called  upon  to  pay  the  same  price 
for  empire  that  the  workers  in  Britain  have  paid ;  that  the 
workers  in  the  other  empires  have  paid.  What  is  the  price  ? 
What  will  world  empire  cost  the  American  workers? 

1.  It  will  cost  them  their  liberties.  An  empire  cannot 
be  run  by  a  debating  society.  Empires  must  act.  In  order 
to  make  this  action  mobile  and  efficacious,  authority  must 
be  centered  in  the  hands  of  a  small  group — the  ruling 
class,  whose  will  shall  determine  imperial  policy.  Self- 
government  is  inconsistent  with  imperialism. 

2.  The  workers  will  not  only  lose  their  own  liberties, 
but  they  will  be  compelled  to  take  liberties  away  from  the 
peoples  that  are  brought  under  the  domination  of  the  Em- 
pire. Self-determination  is  the  direct  opposite  of  im- 
perialism. 

3.  The  American  workers,  as  a  part  of  the  price  of 
empire,   will   be   compelled   to   produce   surplus   wealth — 


THE  AMERICAN  EMPIRE  265 

wealth  which  they  can  never  consume;  wealth  the  control 
of  which  passes  into  the  hands  of  the  imperial  ruling  class, 
to  be  invested  by  them  in  the  organization  of  the  Empire 
and  the  exploitation  of  the  resources  and  other  economic 
opportunities  of  the  dependent  territory. 

4.  The  American  workers  must  be  prepared  to  create 
and  maintain  an  imperial  class,  whose  function  it  is  to  de- 
termine the  policies  and  direct  the  activities  of  the  Empire. 
This  class  owes  its  existence  to  the  existence  of  empire, 
without  which  such  a  ruling  class  would  be  wholly  un- 
necessary. 

5.  The  American  workers  must  be  prepared,  in  peace 
time  as  well  as  in  war  time,  to  provide  the  "sinews  of  war" ; 
the  fortifications,  the  battle  fleet,  the  standing  army  and  the 
vast  naval  and  military  equipment  that  invariably  accom- 
pany empire. 

6.  The  American  workers  must  furthermore  be  ready, 
at  a  moment's  call,  to  turn  from  their  occupations,  drop 
their  useful  pursuits,  accept  service  in  the  army  or  in  the 
navy  and  fight  for  the  preservation  of  the  Empire — against 
those  who  attack  from  without,  against  those  who  seek  the 
right  of  self-determination  within. 

7.  The  American  workers,  in  return  for  these  sacrifices, 
must  be  prepared  to  accept  the  poverty  of  a  subsistence 
wage ;  to  give  the  best  of  their  energies  in  war  and  in  peace, 
and  to  stand  aside  while  the  imperial  class  enjoys  the  fat 
of  the  land. 

7.  A  Way  Out 

If  the  United  States  follows  the  course  of  empire,  the 
workers  of  the  United  States  have  no  choice  but  to  pay  the 
price  of  Empire — pay  it  in  wealth,  in  misery,  and  in  blood. 
But  there  is  an  alternative.  Instead  of  going  on  with  the 
old  system  of  the  masters,  the  workers  may  establish  a 
new  economic  system — a  system  belonging  to  the  workers, 
and  managed  by  them  for  their  benefit. 


266  THE  AMERICAN  EMPIRE 

The  workers  of  Europe  have  tried  out  imperialism  and 
they  have  come  to  the  conclusion  that  the  cost  is  too  high. 
Now  they  are  seeking,  through  their  own  movement^ — the 
labor  movement — to  control  and  direct  the  economic  life  of 
Europe  in  the  interest  of  those  who  produce  the  wealth 
and  thus  make  the  economic  life  of  Europe  possible. 

The  American  workers  have  the  same  opportunity.  "Will 
they  avail  themselves  of  it?     The  choice  is  in  their  hands. 

Thus  far  the  workers  of  the  United  States  have  been, 
for  the  most  part,  content  to  live  under  the  old  system,  so 
long  as  it  paid  them  a  living  wage  and  offered  them  a  job. 
The  European  workers  felt  that  too  in  the  pre-war  days, 
but  they  have  been  compelled — by  the  terrible  experiences 
of  the  past  few  years — to  change  their  minds.  It  was  no 
longer  a  question  of  wages  or  a  job  in  Europe.  It  was  a 
question  of  life  or  death. 

Can  the  American  worker  profit  by  that  experience? 
Can  he  realize  that  he  is  living  in  a  country  whose  rulers 
have  adopted  an  imperial  policy  that  threatens  the  peace 
of  the  world?  Can  he  see  that  the  pursuit  of  this  policy 
means  war,  famine,  disease,  misery  and  death  to  millions 
in  other  countries  as  well  as  to  the  millions  at  home  ?  The 
workers  of  Europe  have  learned  the  lesson  by  bitter  ex- 
perience. Is  not  the  American  worker  wise  enough  to 
profit  by  their  example  ? 

THE   END 


INDEX. 

Advertising  imperialism,  169 

America,  conquest  of,  27 

America  first,  170 

America  for  Americans,  202 

American  capitalists,  218 

"  "  program  of,  226 

"         empire,  costs  of,  160 

"  "        course  of,  158 

**  "        development  of,  15 

**  "         economic  basis  of,  74 

"  "        growth  of,  161 

"         imperialism,  23 

"         Indian,  29 

**  industries,  growth  of,  178 

"         people,  ancestry,  159 

"         protectorates,  207 

"         Eepublic,  disappearance  of,  72 

"  tradition,  failure  of,  12 

"  worker  and  empire,  256 

Anti-imperialism,  68 

Appropriation  of  territory,  213 

Automobile   distribution,  183 

Bankers,  unity  of,  150 
Bethlehem  Steel  Co.,  132 
British  Empire,  gains  of,  198 

"  "         position  of,  234 

"       Labor,  position  of,  250 
Business  control,  148 

Canada,  investments  in,  206 
Capitalism  and  Bolshevism,  244 

"  ''     war,  225 

"  breakdown   of,  248 

"  law  of,  223 

Cherokees,  dealings  with,  33 


Class  government,  10 

"       struggle,  in  Europe,  254 
Coal  reserves,  180 
Cohesion  of  wealth,  8G,  118 
Competition,  ferocity  of,  223 
Competitive  industry,  75 
Conquering  peoples,  26 
Conquest  of  the  "West,  49 
Council  of  Action,  organization,  250 

"  "  National  Defense,  148 

Cuban  independence,  66 

"       treaty,  208 

Dictatorship,  possibility  of,  222 
Dominican  Eepublic,  relations  with,  209 

Education  for  imperialism,  169 
Empire  and  British  workers,  258 

"         characteristics  of,  15 

"         definition  of,  16 

"         evolution  of,  22 

**         prevalence  of,  17 

"         price  of,  20,  264 

"         stages  in,  19 

"         workers  and,  262 
Empires,  the  Big  Four,  231 
Europe,  financial  breakdown,  249 

**         revolution  in,  246 

Financial  imperialism,  135 
Foreign  investments,  131 
France,  gains  of,  197 

Government  and  business,  99 
Great  Peace,  36 
Great  War,  143 

"         "     advantages  of,  to  the  Ignited  States,  157 

"         "     next  incidents  of,  235 

"         "     results  of,  240 
Guaranty  Trust  Company,  136 

Hawaii,  annexation  of,  62 
"         revolution  in,  63 
Hayti,  conditions  in,   210 


Immigrants,  race  of,  160 
Imperial  alignment,  229 
"        goal,  222 
"        purpose,   165 
"        sentiments,  166 
"        task,  237 
"  "       nature  of,  228 

Imperialism,  advantages  of,  256 
' '  beginnings  of,  65 

"  challenge  to,  243 

"  cost  of,  261 

"  establishment  of,  72 

*•  failure  of,  243 

"  psychology  of,   170 

Imperialists,  training  of,  219 
Incomes,  in  the  United  States,  115 
Industrial  combination,  81 
"  organization,  78 

"  revolution,  76 

International  exploitation,  128 
**  finance,  135 

"  Harvester  Co.,  133 

Investing  nations,  127 
Investment  bankers,  86 
Investments  in  the  United  States,  130 
Italy,  gains  of,  197 

Job   ownership,   94 

Labor,  colonial  shortage  of,  38 
Landlordism,  105 
Land  ownership,  103 

"     policy,  104 
Latin  America,   203 
Liberty,  desire  for,  8 

Manifest  destiny,  171 
Mastery,  avenues  of,  92 
Mexican  War,  provocation  of,  55 

"  "      success  of,  56 

Mexico,  conquest  of,  54 
Monroe  Doctrine,  202 

"  "  logic  of,  207 


National  City  Bank,  138 

Navy  League,  146 

Negro  civilization,  in  Africa,  40 
"       slaves,  values  of,  47 

Negroes,  numbers  enslaved,  43 

New  Europe,  246 

Next  War,  contestants  in,  236 
"        "      preparations  for,  241 
"        "      pretexts  for,  238 

New  Orleans,  struggle  for,  50 

Ownership,  advg^ntages  of,   114 

Panama,  relations  with,  213 
"  revolution  in,  215 

"  seizure  of,  214 

Patriotism,  147 
Peace  Treaty,  provisions  of,  224 

"  "         results  of,  194 

Personal  incomes,  sources  of,  116 
Philippines,  conquest  of,  69 
Plutocracy,  117 

"  control  of,  148 

**  dictatorship  of,  92 

**  domestic  power  of,  153 

**  economic  gains  of,  151 

"  growing  power  of,  143 

Popular  government,  9 
Population,  increase  of,  50 
Preparedness,  145 
Press  censorship,  210 
Product  ownership,  96 
Profiteering,  151 
Property,  Indian  ideas  of,  30 

"  ownership,  security  of,  107 

**  rights,  and  civilization,  113 

"  rights  of,  103 

"  safeguards  to,  108 

Public  opinion,  control  of,  98 

Eesources  of  the  United  States,  179 
Eevolution  in  Europe,  246 
Eussia,  Allied  attack  on,  245 
"       world  position  of,  231 


Slave  Coast,  39 

"      power,  defeat  of,  61 

**      trade,  America's  part  in,  44 

"  "       beginnings  of,  39 

"  "        conditions  of,  43 

"         "       development  of,  42 
Slavery,  and  expansion,  60 
"         beginnings  of,  39 
"         in  the  United  States,  45 
Slaves,  early  demand  for,  41 
Southwest,  conquest  of,  51,  57 
Sovereignty,  source  of,  11 
Spanish  "War,  65 
Standard  Oil  Co.,  134 
Surplus,  disposal  of,  123 
"         pressure  of,  121 

Teutonic  peoples,  26 
Texas,  annexation  of,  52 
Timber  reserves,  180 
Transportation  facilities,  183 

Undeveloped  countries,  124 

United  States,  capital  of,  181 

"  "         financial  power  of,  154 

"  "         past  isolation,  192 

"  "         position  of,  221 

"  "  products  of,  184 

"  "         resources  of,  179 

"  "         shipping,  188 

"  "         wealth  and  income,  189 

"  "         -world  attitude  to,  263 

"  "         world  power  of,  177 

AVealth  and  income,  189 

"         of  the  United  States,  89 

"  ownership,  90 

Western  Hemisphere,  and  the  United  States,  200 
"World  conquest,  218 
"Workers'  business,  257 

Yellow  peril,  232 


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